Seasonal Magazine

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VOLUME 10 ISSUE 12 DEC 2011

Boost Your Child’s Self-Esteem 5 Traits of Best Investors 60 New Cars in Auto Expo 2012 Why Android Beats iPhone in India Ranji Exposes Lack of New Bowlers Walk Fast, Live Long The 15 Fastest Growing Cities in India

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EDITORIAL

Seasonal two simple rules for superpower india MAGAZINE

www.seasonalmagazine.com

Vol 10 Issue 12 Dec 2011

Managing Editor Jason D Pavoratti Editor John Antony Director (Finance) Ceena Senior Editorial Coordinator Jacob Deva Senior Correspondent Bina Menon Creative Visualizer Bijohns Varghese Photographer Anish Aloysious Correspondents Bombay: Rashmi Prakash Hyderabad: Iqbal Siddiqui Delhi: Anurag Dixit Director (Technical) John Antony Publisher Jason D

USD 53,000 is around Rs. 26.5 lakhs. If it is someone’s annual income, it boils down to around Rs. 2.20 lakhs per month. Roughly what many are getting in Europe or USA these days. But what if by the time your grandchildren enter their first job in India, this would be the bare minimum salary they could expect?

Yes, India is racing to that future. At least in paper projections. All it would take is less than the next 40 years. According to Citigroup’s latest projections - which has so far not attracted any serious criticism - it would take only 39 years for India to be the largest economy in the world, at almost $86 trillion GDP @ purchasing power parity, by overcoming China narrowly, and by which time US would be a distant third at barely half of this figure.

Don’t ever think, however, that politicians of the current breed has got anything to do with it. In fact, the best thing they could do is keep far away, and not pose hindrance to this momentum. This momentum, as this study projects, is largely reliant on only two things - our demographics and democracy.

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The study is simple stuff to understand. India’s current population growth and demographic profile will ensure that this country will be home to the world’s largest population of working-age people at over 800 million. This advantage will begin as early as 2015 and extend well over 2035, before tapering off by the 2040s.

Why we will outpace China is simple - the Dragon is already in the tapering off stage, with its working-age population staring to dwindle on strictly controlled birth rates.

In other words, we in 2011, are now standing at the threshold of this revolution.

Certainly living in times, where bungling up by politicians will be an unpardonable mistake. The real wonder of this projection is that we need to grow at only single digits - just over 8% - year after year to arrive at this miracle prosperity.

Of course, this is only now in paper. Ask anyone on what they see as the highest hindrance to this, and they would respond without blinking an eye - corruption.

Thanks to Anna Hazare, this bane of the Indian society is now getting highlighted, much like how Ambedkar succeeded in highlighting caste-based discriminations a few decades back.

But is that all? To make these paper projections work, we need to have not just human resources, but human talents. A renewed and long-term focus on upgrading the education system might just do the trick. But even that isn’t all.

Indian talent is today not behind any other nationality. Whereas a decade back it was

our foot-soldiers like engineers and doctors who made their mark in the Western Hemisphere, today it is the turn of the Indian born CEOs who are acknowledged for their integrity, reliability, and tenaciousness. In renowned international lists like S&P 500 and Fortune 500, there are more Indian origin CEOs, than any other nationality, except for of course USA. Indian CEOs outclass both Canadians and Chinese, the next leading contenders by a good margin.

So the point is that talent was never rare among Indians. A renewed vigour in educational reform will definitely enable India to scale up our talent factory. But for what, is the moot question. To head more Pepsicos, Deutsche Banks, Citicorps, MasterCards, & Unilevers?

Let us shout aloud: where is the Global Indian Organization? Embarrassingly we hear the world shouting back: Where is your innovation?

Innovation is what distinguishes between a thriving Apple and a sinking Sony. Innovation is what demarcates between a fearfully large Facebook and a rapidly dying Yahoo. Innovation is what makes American machinery manufacturers thrive even to this day with $33 billion in new orders in September alone, when the whole world is facing slower growth.

Companies like Caterpillar, Deere, Eaton, Cummins etc are all in peak momentum, hunting the whole world for capital expenditures in sectors ranging from industry to energy to agriculture.

How is this possible? There are only two rules. 1) Innovate for the whole world. 2) Sell in the whole world.

It is high-time India got its act together to promote global innovation by Indians and not just mere Indian entrepreneurship.

Naming an airline on one’s beer and wasting thousands of crores of taxpayer money in wasteful spending is no entrepreneurship. But even worse was the sin of him who fooled Mallya that a low-cost airline - with a gaping hole in its wallet - was a great revolutionary business model. Is this the kind of entrepreneurship our banks and taxpayer money should back? Even the Nano is causing embarrassment to India, with its non-acceptance by even Indians, if not its infamous fires.

It is not just the role of public or Governments or business leaders. A few days back, a Google engineer hit the whole of Google Inc with a long rant in the form of a Google+ post. He was calling the naked king a naked king - arguing why Google+ will never ever overtake Facebook due to an architectural flaw. Facebook he rightly argued, was making billions off other developers’ efforts thanks to their superb developer platform, whereas Google+ platform was a big zero.

Imagine, a single employee fighting the mighty system. Embarrassingly for Google, the post became available in public domain due to a posting mistake. Any Indian entrepreneur or business manager bullish on innovation should read this post - it is too good - and think loud - will this employee survive in the Indian context? Yet, despite the gross embarrassment, Google Inc is not firing him, but listening to him keenly, and that culture is what makes sense for any business out there which is looking for innovation and world dominance.

Let us all tell ourselves each day - no nation became prosperous without innovation and targeting the whole world.

Behind Our Cover Story Our cover story this time is on Banking Sector Outlook. Titled, ’BANKS SHAKEN, BANKS STEADY, BANKS SOARING’, it is an attempt to decode the myriad numbers the country’s banks have presented in the second quarter and to see the hidden signals for future prospects. The story in nutshell from Q2 is one of soaring NPAs, soaring provisioning, and lacklustre growth. Even in some stories that present good headline numbers, we find that the numbers were managed on aggressive write-offs or upgrades of loans. Again, there is a lack of innovation, and even worse, a case of faulty business models like Air India, Kingfisher and Deccan360 delivering serious blows to their bankers. But amidst the gloom, there was also a handful of robust performances too from the sector. And some Indian banks, especially PSBs, seems to be reaching out more to the world market, these days. Seasonal Magazine brings you a performance appraisal and what to expect in 12 leading banks.

John Antony

CONTENTS

FAMILY

Boost Your Child’s Self-Esteem Self-esteem is a person's core belief about himself or herself. A person's self-esteem is reflected in his or her actions, both in how as well as what he or she does. Although self-esteem varies from time to time, the pattern usually leans toward a healthy or unhealthy view of self. With healthy self-esteem, a person is more likely to succeed in life.

GADGETS

Why India Goes with Android Rather Than iPhone Well, the best reason is that Apple doesn't care enough for India to price its products reasonably in this developing country. But..

HEALTH

The Art of Power Snacking

Try some snacks that pack a nutritional Punch for a small. price One of the biggest myths about snacking is that it's a bad thing. The truth is that it's not snacking itself that's bad for us. It's all the junk food people like to snack on that gives snacking a bad name: chips, candy bars...

INNOVATION

A 4-Room House Under Rs. 50,000?

MIT architects produce the first prototype of a low-cost house that has four rooms, is easy to build, and costs just Rs. 47,000.

AUTO TECH

What Goes Into a Mean F1 Machine?

Have you ever had questions about the working and mechanisms of a Formula One car? Ever wondered how different is the..

TECHNOLOGY

Facebook & HTC Building Android Smartphone Facebook has allied with Taiwan's HTC to build a customized smartphone powered by Google's Android mobile operating system, according to a leading technology blog ...

Sabeer Bhatia Back with Free SMS JaxtrSMS lets users send unlimited free text messages to any other phone anywhere in the world.

IN FOCUS

Manappuram Not Just Creates Wealth, But Shares it Too

Manappuram Finance has delivered yet another quarter of blockbuster results, with both income and profits more than doubling, and clearly outpacing most..

FITNESS

Walk Fast, Live Long?

US researchers say your gait can predict your longevity, as a new study found that seniors with the fastest strides lived longer than their slower walking counterparts.

Published last week in the Journal of the American Medical Association, the study examined the walking speeds of some..

SPORTS

Lack of Good Bowlers Felt in Ranji With three rounds of Ranji Trophy completed, the season seems to be playing out no different from the previous years.

Senior pros think the players are more focussed and competitive but the overall...

TRAVEL

INTERNATIONAL

Is America Finally Turning Against Pakistan?

India's troubled neighbour is fast losing its closest ally in the US - Republican Party as GoP presidential candidates eyeing the fight against Obama, is turning the tide finally against Pakistan.

PERSONAL FINANCE

4 Ways Loans Turn Foul Since owning a house is a cherished dream of many Indians, stretching the budget is considered acceptable. They end up seeking a loan larger than required and the realisation dawns only when the EMIs start taking their toll on their finances. Ideally..

Full of Surprises

INDIA in...

Full of Surprises in...

The 15 Fastest Growing Cities in India There are 37 Indian cities among the world's 300 fastest growing urban centres, according to a survey conducted by the City Mayors Foundation, an global think tank on urban affairs. There are many shocking surprises in this reliable list which is largely based on population growth rate, as this automatically takes most other paramaeters into consideration. The biggest shock is that Mumbai is not even among the Top-25. An equal shock is that New Delhi is still growing with great momentum, and is the country's 8th fastest despite its already huge size. Another surprise is that Bangalore is the only South Indian city among Top-15, with only one other South Indian city,

Foreign Travel Falls as Rupee Soars Foreign travel bookings out of India for this winter have gone down considerably, with international holidays becoming expensive thanks to the rupee plunging to new lows..

INSPIRATION

Steve Jobs’ 7 Mantras of Success

How is it that a college dropout, who landed in his parents' garage and who was once kicked out of his own company, became one of the world's foremost innovators?

INVESTMENT

5 Traits of Best Investors Here are five common traits noticed among some of the world's best investors...

CONTENTS INDIAN OVERSEAS BANK

ORIENTAL BANK OF COMMERCE

IOB Assumes Proactive Role in Industry, Even While Q2 Shows Continuing Momentum

Asset Quality Concerns Drag Down OBC Q2 Net Profit

OBC’s Q2 results have come as a shocker to investors in the counter.

Even while the PSB witnessed reasonable revenue growth of 27%...

Indian Overseas Bank is now at the center-stage of the country’s banking industry, having recently hosted Bancon 2011 in Chennai from November 4th to 6th. Done in association with Indian Banks’ Association, IOB’s proactive role

INDIAN BANK

Indian Bank Q2 Good, Amid Asset Quality Concerns

Indian Bank’s Q2 numbers are reasonably good, with the topline growing by 20.6%, and bottomline or net profit growing by 12.7%, both yearon-year. Growth came from all segments, with both interest income...

BANK OF BARODA

BoB Faces Tough Challenges in Urban & Corporate Sectors, Q2 Headline Numbers Good

Even while a few of its peers faced a negative turnaround, and many of them faced lacklustre growth, Bank of Baroda has once again proved that it ..

The pressures of Q2 was a bit too much - enough to separate the wheat from the chaff. While Q2 left many Indian banks shaken for ever, some of them held steady in the storm, and a few of them even managed to soar. Anyway Q2 is passé now. The greatest utility of Q2 numbers is in assessing Q3, Q4, and the fiscal to come. Close on the heels of Q2 came another game changer - de-regulation of savings bank rates...

CORPORATION BANK

KARNATAKA BANK

Corporation Bank is re-inventing itself these days with a definite aim to more than double its total business by 201415. But the real beauty is that this..

Karnataka Bank has delivered what is one of the best quarterly results among all banks, private and public. Net profit is up by more than 43%, while net interest income is up by more than..

KARUR VYSYA BANK

BANK OF INDIA

CorpBank Maintains Momentum by Balancing Innovation and Social Justice

Karnataka Bank Delivers Robust Numbers in Q2

DHANLAXMI BANK

Dhanlaxmi Q2 Signals an EmphaticTurnaround, Enough to Silence Critics Mid-sized private sector lender, Dhanlaxmi Bank, has given a strong signal of positive turnaround in performance, with both income and profits growing strongly in Q2, both on...

PUNJAB NATIONAL BANK

PNB Q2 Reveals Asset Quality Deterioration Headline numbers were good in Punjab National Bank’s Q2 results, with total revenue up by 22.5% and net profit up by 12.1%. The business growth was more on the deposit side rather than on the advances. However, the crucial...

CANARA BANK

Canara’s Profits Slump as NPAs, Provisioning Soar Canara Bank’s net profit is down by 15.44% on an year-on-year basis, unlike many of its peers who managed at ...

KVB Puts On a Good Q2 Show Karur Vysya Bank’s consistent performance continues even in these troubled times. While net interest income jumped by an impressive 49%, net profit rose by a decent 10.44%..

BoI Fights Challenges Through Innovations If ’Bank of India’ was a sobriquet, it would have been a heavy one for Bank of India Ltd. As a moniker it would be more fit for Reserve Bank of India, or at least State Bank of India. But for the..

SYNDICATE BANK

Syndicate’s Profits Jump, But Pressure Seen on Margins, NPAs

Syndicate Bank has delivered a good set of headline numbers for the second-quarter. Net profits are up by 36%, and total income is up by a similar figure of 35%. But looking closely, the jump in net profit is also due to lower than expected effective..

WORLD

Is America Finally Turning Against Pakistan?

India's troubled neighbour is fast losing its closest ally in the US Republican Party - as GoP presidential candidates eyeing the fight against Obama, is turning the tide finally against Pakistan.

SEASONAL MAGAZINE

epublican presidential candidates have criticised Pakistan, calling it one of the most violent and unstable nations but remained sharply divided over whether the US should continue to provide aid to Islamabad. While Texas governor vowed to cut down US aid to Pakistan to zero till it helped US meet its national security interests against terrorists, two other Republican candidates Jon Huntsman and Newt Gingrich argued in favour of more drone attacks against terrorists inside Pakistan. Congress woman Michele Bachmann, however, argued in favour of continued engagement with Pakistan given that it was a nuclear weapon state.

"Pakistan is a concern. That's the

While Texas governor vowed to cut down US aid to Pakistan to zero till it helped US meet its national security interests against terrorists, two other Republican candidates Jon Huntsman and Newt Gingrich argued in favour of more drone attacks against terrorists inside Pakistan. country that ought to keep everybody up at night. You have not (Pak) President (Asif Ali) Zardari in charge but (its Army Chief) General (Ashfaq Pervez)

Kayani, over the military, which also is responsible for the ISI. "You've got the youngest demographic of 160 million people in Pakistan.

You've got a madrassa movement," Huntsman said. "You've got over 100 nuclear weapons. You've got trouble on the border. You've got a nation-state that is a candidate for failure. I say it's a haven for bad behaviour, it's a haven for training the people who seek to do us harm," Huntsman said adding that he was in favour of expanding drone program which would serve US national interests. Acknowledging that Pakistan has been "the epicentre of dealing with terrorism" Congresswoman Bachmann said...

that the country has training centres for terrorist outfits. "They also are one of the most violent, unstable nations that there is," she said. A member of the intelligence committee in the House of Representatives, she said 15 of the nuclear sites in Pakistan are available or are potentially penetrable by jihadists. "Six attempts have already been made on nuclear sites. This is more than an existential threat," Bachmann said. "We have to take this very seriously. The US has to be engaged. It is complicated. We have to recognise that the Chinese are doing everything that they can to be an influential party in Pakistan.

We don't want to lose influence," she said. "...A nation that lies, that does everything possibly that you could imagine wrong -- at the same time, they do share intelligence data with us regarding al-Qaida," she said. "We need to demand more.

The money that we are spending

Jon Huntsman right now is primarily intelligence money to Pakistan. It is helping the US," Bachmann said thus arguing that it was not in the national security interest to snap ties with Pakistan. "At this point I would continue that aid, but I do think that the Obama policy of keeping your fingers crossed is not working in Pakistan," she said. However, Texas governor Rick Perry advocated

SEASONAL MAGAZINE

"...A nation that lies, that does everything possibly that you could imagine wrong -- at the same time, they do share intelligence data with us regarding al-Qaida,"

Michele Bachmann

Newt Gingrich against any aid to Pakistan. "Until Pakistan clearly shows that they have America's best interests in mind, I would not send them one penny," he vowed. But Bachmann still argued in favour of engaging Pakistan as the consequences otherwise would be very dangerous for the US. "We have to recognise what's happening on the ground. There are nuclear weapons all across this nation, and potentially al-Qaida could get a hold of these weapons," she said. Perry said that US needs to engage in India and Afghanistan.

"We've got Afghanistan and India working in concert right now to leverage Pakistan," he said. "I think if we would create a trade zone in that part of the world, where you have all of those countries working together, that may be the answer to getting Pakistan to understand that they have to work with all of the countries in that region," the Texas Governor said. Gingrich, the former Speaker of the House of Representatives, took a tough approach against Pakistan. "You tell the Pakistanis: Help us, or get out of the way, but don't complain if we kill people you're not willing to go after on your territory where you have been protecting them," he said.

TRAVEL

Foreign Travel Falls as Rupee Soars Foreign travel bookings out of India for this winter have gone down considerably, with international holidays becoming expensive thanks to the rupee plunging to new lows.

Delhi-based D.Paul's, which was clocking a growth of 70-80% growth year-on-year till October, said the business slowed down 20%. "Winter packages are nearly 17-18% more expensive compared to summer season," R Singh, director of D.Paul's said. Add to that rupee devaluation and other factors, like airport development fee, the total travel package cost increased 30-35%.

SEASONAL MAGAZINE

He said that even if a consumer has booked his holiday package in advance, he needs to pay the differential amount, based on the rupee-dollar exchange rate. A travel company usually puts such conditions in their agreements with outbound tourists.

Travel operators said that floods in Thailand, which is the most popular destination among Indians, also contributed to the slowdown. Indian families usually travel to short-haul destinations in south east Asia during the winter season, and Thailand contributes 20-30% of the overall travel footfalls going abroad. Other destinations like Australia and New Zealand are also popular during winter season.

"Even as some islands of Thailand are unaffected, consumers are being cautious. Singapore on its own is very

expensive which leaves travellers with no option but to visit Malaysia, where prices have shot up due to high demand," a travel company executive who did not want to be named said.

"If we were expecting to grow by 30% during the winter months, we have grown only by 10%," he added.

The winter season is the second largest holiday season for Indians after the summer months and the Diwali breaks when schools announce vacations. In addition, traditional wedding season leads to a large number of honeymooners opting for holidays around this time of the year.

But high prices for international holiday packages have put the Indian families at the backfoot as they are being more cautious booking at the last minute as well as looking for shorter trips this winter.

"In the past few weeks, bookings for airline tickets for leisure destinations are down by 7-8% from a year ago," said Ankur Bhatia, executive director Bird Group, a travel solutions company.

Tour operators are also noticing late bookings by Indian families. Travel companies usually sell nearly half of their inventories by October-end.

This time around, bookings for Christmas and New Year packages are expected to happen as late as the first week of December. Some travellers are also postponing their holidays to the January-March quarter hoping for the market to stabilise.

Rajeev Duggal, managing director of Kuoni India, one of the biggest travel firms, said that companies are closely watching the situation with uncertainty in economic conditions as well as currency value fluctuations.

"Growth for bookings has slowed down during the third quarter as consumers are opting for shorter breaks and are being cautious about international holidays.

Some are even postponing it to the fourth quarter," he said, adding, "that going by advance bookings, the January-March quarter could see higher growth in volumes than the October-December quarter".

INVESTMENT

Five Traits of Best Investors Here are five common traits noticed among some of the world's best investors.

SEASONAL MAGAZINE

2. Best Investors Use Checklists People usually screw up because either they don't know what they're doing, or what they're doing is so complex that they become forgetful. The airline industry has nearly eliminated the latter with a simple tool: checklists. The rate of human error in airline accidents fell precipitously after Boeing introduced pilot checklists in the middle of the 20th century. Great investors are starting to catch on - an outgrowth of Atul Gawande's excellent book The Checklist Manifesto. Several now use investment checklists before making

5. Best Investors are Small Berkshire Hathaway is the best example. One of the largest investment funds in the world is run by two people: Warren Buffett and Charlie Munger.

1. Best Investors Learn From Each Other The US Securities and Exchange Commission makes all money managers running more than $100 million report their stock holdings every quarter. It's called a 13F filing. In India, it is like monitoring what the biggest investors like Mutual Funds, FIIs, Proprietary A/c's of Brokerages are doing by closely watching Exchange filings. Most money managers don't find this burdensome at all. They love seeing what the competition is up to. Value investor Mohnish Pabrai says he spends a good amount of time poring over these filings in search of investment ideas. "I rarely use computer screens to find ideas," he said last year. "I am looking at 13Fs from folks I respect quite a bit." You could have used this filing, for example, to see that Pabrai was buying shares of Wells Fargo in early 2009, before it tripled.

mistakes. What happens afterward distinguishes the hacks from the pros.

Pabrai, mentioned above, spends more time at his annual meeting explaining what he did wrong than what went well, even in years when his returns are off the charts.

His investors love the humility, and most importantly, he learns from the mistake (adding it to his checklist!) to prevent recurrences. Those who bury and ignore mistakes are bound to repeat them.

Warren Buffett

new investments in an attempt to eliminate errors.

Rakesh Jhunjhunwala

3. Best Investors are Diverse Learners Charlie Munger likes to talk about worldly wisdom - mental models collected from diverse disciplines, entwined together to solve problems.

It's the only way around the classic manwith-only-a-hammer-sees-everyproblem-as-a-nail dilemma. It's also vital in investing. The biggest challenges money managers come across have nothing to do with finance. Psychology, cognitive biases, geopolitics, engineering, history, and even anthropology can be some of the most practical skill sets.

Barry Ritholtz of Fusion IQ just wrote a great op-ed in The Washington Post regarding "five fields that are hugely helpful to asset management." Ritholz lists historians, psychiatrists, trial lawyers, mathematicians and statisticians, and accountants. Anything but an MBA, really.

4. Best Investors Focus on Their Mistakes Than successes Every investor will inevitably make

Mohnish Pabrai

Same with India's Rare Enterprises, which runs mainly on Rakesh Jhunjhunwala's brain. This skeletoncrew setup is actually common among great investors. Some of the world's best investment funds often consist of a manager, a secretary, and an accountant. That's it. That's all you need, really. Funds that employ legions of analysts and lawyers are usually doing really complicated things, increasing the odds that something terrible will happen. Investing isn't a game in which 100 junior analysts beat one seasoned, emotionally stable investor. Quite the opposite, actually.

(By Morgan Housel, from The Motley Fool, adapted suitably for Indian readers)

BOOST YOUR CHILD’S SELF-ESTEEM F A M I LY

SEASONAL MAGAZINE

Children sense that they belong by the way their parents talk to them and act toward them. Show and tell your child that you love and care for him or her.

elf-esteem is a person's core belief about himself or herself. A person's selfesteem is reflected in his or her actions, both in how as well as what he or she does.

Although self-esteem varies from time to time, the pattern usually leans toward a healthy or unhealthy view of self. With healthy self-esteem, a person is more likely to succeed in life.

You can promote your child's development of healthy self-esteem by starting a cycle of belonging, learning, and contributing.

Although building self-esteem is a lifelong process, the foundation of self-esteem is established in childhood. That foundation can do much to help a child deal with difficult life issues as they are encountered.

Parents have the greatest influence on a child's belief about himself or herself.

Letting your child know that he or she belongs, is doing well, and is contributing can help him or her develop healthy self-esteem.

Keep these things in mind as you raise your child.

Children sense that they belong by the way their parents talk to them and act toward them. Show and tell your child that you love and care for him or her.

Children learn how to work with others by learning how to cooperate within a family. Give your child some ageappropriate household responsibilities.

What helps a child develop healthy selfesteem?

You can promote your child's development of healthy self-esteem by starting a cycle of belonging, learning, and contributing. A sense of belonging

SEASONAL MAGAZINE

Adults who have healthy self-esteem are well equipped to succeed in life.

Children learn about how well they are doing by how their parents react to their behavior. Offer praise at least twice as often as you criticize (and try for four times as often).

SEASONAL MAGAZINE

helps a child to participate in learning new things; learning makes a child feel confident in making contributions; making contributions helps secure a feeling of belonging. This cycle helps establish and strengthen a child's self-esteem.

personal, family, and social-of a person's life. Adults who have low self-esteem feel that they do not belong, that they cannot learn and accomplish things, and that they do not have anything to contribute.

Low self-esteem limits a person's ability to do well in the world.

Developing healthy self-esteem is a process that continues throughout life and helps a person act responsibly, cooperate well with others, and have the confidence to try new things.

On the other hand, adults who have healthy self-esteem are well equipped to succeed in life. They have the confidence to try new things and learn new skills. They are responsible adults, are able to cooperate well with others, and are happy.

Why should you help your child develop healthy self-esteem?

Helping your child feel that he or she has a place in your family will contribute to his or her ability to become a responsible adult.

Self-esteem affects all aspects-

Helping your child feel that he or she

has the ability to learn will contribute to his or her confidence in developing new skills throughout life.

Helping your child feel that he or she can contribute to the family as a whole will make your child more likely to cooperate with other people and find ways to contribute to the well-being of his or her group or to society.

How you can help your child develop healthy self-esteem?

Developing a sense of belonging, learning, and contributing can help your child develop healthy selfesteem. The following are ways you can help promote this

You can promote your child's development of healthy self-esteem by starting a cycle of belonging, learning, and contributing.

Belonging Through contact with others, we know that we are loved and respected and that we belong. Use the following suggestions to help your child feel he or she belongs within your family.

Show your love. Let your child know you love him or her for who he or she is, not for what he or she does. Make it a habit to show your love for your child in at least two ways each day.

Let your child know that he or she is special. List at least three of your child's good qualities and post them on your refrigerator. Add to these qualities from time to time.

Celebrate your child's good qualities often.

Praise your child. Make positive comments about your child's behavior at least twice as often as you make negative comments (and try for four times as often). Notice your child's strengths, even when he or she is misbehaving. When you focus on what you like, your child's behavior will improve.

Listen to your child. When your child shares something with you, give him or her your undivided attention and listen carefully. Don't give advice unless asked for it or you feel your child's safety is involved. Don't ridicule or shame your child.

Have family times. Have regular times for the family to have fun together, such as playing board or card games. Try to have as many family meals together as possible.

Don't discuss problems or concerns during these times

unless it is absolutely necessary.

Encourage positive peer experiences.

Look for activities with peers where your child can feel success and acceptance, such as participating in a sport or joining a club.

Learning Although learning really takes place all the time, plan to create a learning opportunity for your child at least once a week.

Choose a learning activity. Choose an activity that is appropriate for your child's age and that builds on his or her strengths. Do not overstress the danger or difficulty involved in a task or activity. You might invite your child to help with one of your chores or hobbies. If you do, be sure that you are not feeling rushed during the activity.

Let it be a fun time.

Let your child try. Even if your child has difficulty with a new task or skill, don't quickly take over and show him or her how to do it. Be patient and let your child try.

Break up a complex task. Simple steps help a child see progress when learning a complex skill.

Don't embarrass your child by asking him or her to do difficult tasks in front of other people.

Praise accomplishments. Even if the completed work does not meet your standard, find at least one positive thing to say.

Encourage practice. When your child is learning a new skill that takes practice, such as riding a bicycle, don't expect perfection the first time.

Encourage your child to practice and talk about his or her improvement with each p.ractice time.

Contributing Contributing enhances our feelings of belonging, providing the basis for continued learning and strengthening of self-esteem.

Every day, use the following suggestions to help your child feel that he or she is contributing.

Set family rules. Family rules help children know that the family stands for something and gives them exposure to order and ritual.

Have as few family rules as possible and enforce them consistently. Write down your family's rules and the consequences if those rules are broken in a family rules form.

Invite cooperation. Regular family meetings are a way to help children learn to cooperate. Family meetings are a place where family members discuss concerns and problems.

Expect accountability. You can help your child learn to be responsible by assigning him or her some household chores. Make sure the chores are appropriate for your child's age. As your child grows, hold your child accountable for his or her choices and behavior and let your child experience natural or logical consequences.

Express appreciation. Let your child know you appreciate his or her help with tasks, even household chores.

You may want to keep a journal when you are starting to use this method. Each day for at least 3 weeks, write in your journal specifically how you helped your child develop a sense of belonging, learning, and contributing. Keeping a journal for an extended period of time will help encourage positive behavior. After 3 weeks, review your notes to see your child's progress and to identify new ways to help your child.

Where to go from here Although it is best to start when your child is a baby, it is never too late to help a person improve his or her self-esteem.

Source: Web MD

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development in your child. Use the brief belonging, learning, and contributing checklist as a daily reminder to let your child know he or she belongs, is learning, and is contributing.

H E A LT H

The Art of Power Snac Try some snacks that pack a nutritional boost for a small price ne of the biggest myths about snacking is that it's a bad thing.

The truth is that it's not snacking itself that's bad for us.

It's all the junk food people like to snack on that gives snacking a bad name: chips, candy bars, french fries, soda, and so on.

In fact, if you eat until you are comfortable (not "full") at lunch, chances are you'll need a mid-afternoon snack to tide you over until dinner with plenty of energy. The secret is to snack only when you need to and to select smarter snacks.

Try these seven tips for smart snacking. Let's get going!

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1. Give healthy snacks a chance.

If you try some of the healthier snack alternatives out there, you may well find that you enjoy them. This appears to be true even of college students. One college dining hall discovered that when it offered healthy snacks along with traditional ones, a significant portion of the student population actually opted for health. The dining hall, which regularly sold snack bags containing sugar-laden soda, cookies, and candy, began also offering "smart snack bags," containing

baked chips, low-fat cookies, fruit cups, sunflower seeds, and water. And for every two students who bought the traditional, sugar-soaked snack bag, there was one who bought the "smart" snack alternative.

If you're one of the many people whose idea of a good snack is something crunchy and salty, know that you can have your crunch and eat smart, too. Here are a few possibilities for more healthful crunchy snack foods:

2. Avoid trans fats.

You've no doubt heard of the trouble with trans fats by now (they raise "bad" and lower "good" cholesterol). Well, guess which type of food they tend to lurk in? Snack foods things like crackers, snack cakes and pies, frozen fried microwave snacks, and cookies.

Anything with "partially hydrogenated vegetable oil" listed among the top three ingredients on the label is suspect. Some manufacturers have done a good job of reformulating products to remove trans fats, but keep an eye out anyway.

3. Be a label detective.

Don't decide whether to buy a food based on the advertising banners on the front of the package. Check out the Nutrition Information label on the back, too. This will

king

4. Be careful with energy bars.

and good nutrition. The truth is, these carry-anywhere bars can come in handy. But a review of many different energy bar labels reveals that choosing a bar is a matter of "picking your poison."

That is, deciding what means most to you - taste, fat, fiber, protein, sugars? Generally, if bars are "low in carbs" they're also low in fiber and/or higher in fat. (Some even have quite a bit of saturated fat.)

And if a bar tastes pretty good, it probably has at least 12 grams of sugars per serving.

There are all kinds of "energy" or "power" bars being marketed under the guise of convenience

When picking one, look for at least 3 grams of fiber (preferably 5 grams), at least 5 grams of protein

tell you what the company calls a portion of that food. Prepare to be amazed: What they say is a serving and what you actually eat may be completely different. The Nutrition Information label lists the calories; grams of fat, saturated fat and trans fat; and, sometimes, grams of sugar. So if the label says a serving is 1 ounce of chips and you eat 2 or 3 ounces, double or triple the nutrition information numbers.

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Anything with "partially hydrogenated vegetable oil" listed among the top three ingredients on the label is suspect.

(preferably 10 grams), lower amounts of fat with no saturated fat, and fewer than 20 grams of sugar.

5. Don't snack if you aren't really hungry.

Some French researchers studied the effect of two types of snacks (one high in carbohydrate and one high in protein), given a few hours after lunch, on eight lean young men. They concluded that when people who aren't hungry eat a snack -- whether it's high in carbs or protein -- they do not tend to reduce the number of calories they eat at dinner. The researchers believe this is evidence that snacking can play a role in obesity.

Are you wondering why these men weren't "hungry" a few hours after eating lunch? Researcher Didier Chapelot, MD, PhD, of the University of Paris, said that, in

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A review of many different energy bar labels reveals that choosing a bar is a matter of "picking your poison."

People who usually eat only three times a day are not generally hungry until 5-7 hours after lunch.

France, most people don't eat anything between lunch and dinner. He also noted that people who usually eat three times a day (as the men in this study regularly did), are not generally hungry until 5-7 hours after lunch.

6. Avoid high-fat snacks.

There are lots of reasons to avoid fatty snacks, including the possibility that they actually encourage overeating.

Pennsylvania State University researchers found that rats who were regularly fed a high-fat diet

ended up overeating high-calorie, high-fat foods, compared with rats fed a low-fat diet. The researchers suspect this has to do with a decrease in sensitivity to a hormone that normally sends a "stop eating" message to the brain.

7. Look out for TV temptations.

Convenience and fast foods high in fat and sodium made up 57% of the food advertised during the most popular TV shows, according to research by University of Illinois speech communication professor Kristen Harrison, PhD. Harrison's research also revealed that snacking is featured in food advertising more often than all three meals combined (breakfast, lunch, and dinner). So if you watch TV, keep in mind that food companies are working to lure you into buying their snack foods and junk foods.

INNOVATION

A 4-Room House Under Rs. 50,000?

MIT architects produce the first prototype of a low-cost house that has four rooms, is easy to build, and costs just Rs. 47,000.

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ome prices in many of the world's most famous cities run to well over $1,000 per square foot. By contrast, Massachusetts Institute of Technology architects have produced a decidedly more affordable alternative: the first prototype from the "1K House" project, an effort to see if cheap homes for the poor can be constructed for $1,000 (Rs 47,000 approx), total.

The prototype, called Pinwheel House, was designed by Ying chee Chui, a graduate of MIT, and has been constructed in Sichuan Province, China. "It's part of the responsibility of an architect, to create spaces for people to live," Chui says. "It's from the heart."

Chui first designed Pinwheel House in 2009 as part of the design

"The module can be duplicated and rotated, and then it becomes a house," Chui says. "The construction is easy enough, because if you know how to build a single module, you can build the whole house."

studio – essentially a class – that launched the 1K House effort. The project is particularly focused on affordable housing for areas hit by natural disasters, such as the 2008 earthquake in Sichuan.

This prototype turned out to be more costly, at $5,925, but is still very inexpensive in relative terms.

The idea to attempt building $1,000 homes was first conceived by MIT professor Tony Ciochetti, inspired by the One Laptop Per Child, the foundation headed by Nicholas Negroponte that brings low-cost PCs to children.

"There is a huge proportion of the world that has pressing housing needs," says Ciochetti, who first got the idea for the initiative after seeing a family of four emerge from a tiny mud hut while travelling through rural India.

Like One Laptop Per Child's aim of developing $100 computers, Ciochetti adds, the idea of the $1,000 house is intended as a challenge to designers: "Can you build affordable, sustainable shelter for such a large population?"

PINWHEELAND COURTYARD Chui's house is one of 13 plans that emerged from the first 1K House design studio, in 2009. It features hollow brick walls with steel bars for reinforcement, wooden box beams, and is intended to withstand a magnitude 8.0 earthquake.

Chang, for his part, is originally from China.

He was attracted to the 1K House project, in part, by the shortage of good housing in some parts of his native country.

That figure could be still lower if a large number of the homes were built at once, she adds. In any case, the central design concept of Pinwheel House is the same: It has a modular layout, with rectangular room units surrounding a central courtyard space.

construction is easy enough, because if you know how to build a single module, you can build the whole house."

"The module can be duplicated and rotated, and then it becomes a house," Chui says. "The

Yung Ho Chang, of MIT who helped oversee the 2009 1K House design studio, thinks the prototype has

fulfilled the promise of Chui's design. "The house Chee built has good ventilation and good light," Chang says.

Chang, for his part, is originally from China. He was attracted to the 1K House project, in part, by the shortage of good housing in some parts of his native country.

"After the earthquake, this project came as a natural thing to do," Chang says. "It's not just about how cheap the house is, but if it's decent. When you look at living conditions in parts of China, India and Africa, they don't meet the basic standards of what we think of as real housing."

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The Pinwheel House prototype was more expensive to build partly because it is larger than Chui's original design – about 800 sq feet, rather than 500 sq feet. The smaller version of the house could be built for about $4,000.

GADGETS

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Why India Goes with Android Rather Than iPhone Well, the best reason is that Apple doesn't care enough for India to price its products reasonably in this developing country.

But is that alone?

Despite their eye for affordable products, Indians are also among the most discerning users of tech. For them, there are many areas where Androids score over iPhone.

Steve Jobs is to the world of smart phones what Aishwarya Rai is to the world of Hollywood films not the first, not the best but still the most popular. iPhone emerged on the horizon of smart phone technologies and mustered huge fan following in no time. Its easy to use features, wide display screen and multi touch capabilities soon saw it eating into the market share of mobile giants like Nokia.

Then came Android-based phones in 2008 and prepared the war field in the mobile technology battle.

Both iPhones and Android phones are creating waves and have completely enhanced the user experience with mobile communication. In this mad race

Multiple notifications Android phones have capabilities to display multiple notifications on top of the phone screen unlike iPhone which can display only one notification at a time. For instance on an Android phone you can see notifications about your new emails, tweets, app updates, Facebook updates and others in a single glance while in iPhone you have to tap on each app to see if there is any new email, tweet and wall post.

Android phones allow you to create widgets of your favourite and the most used applications on your phone's home screen.This means every time you access the most frequented application you do not have to scroll through dozens and dozens of applications installed on the phone just like what iPhone users do.

Easy access of frequently used applications Android phones allow you to create widgets of your favourite and the most used applications on your phone's home screen. This means every time you access the most frequented application you do not have to scroll through dozens and dozens of applications installed on the phone just like what iPhone users do. Widgets are very handy and save time and effort each time you have to use your pet apps. If you feel you aren't using a particular app as frequently you can just dump its widget into the trash. The main programme would still be available on your phone.

Widgets are like short cuts of phone apps, just like how you have short cuts of programmes on your computer's desktop.

Quick connectivity options In iPhone you have to get into the settings app to make any modifications to connectivity tools like Bluetooth, Wi-Fi, GPS etc. but Android phones have quick buttons on one of their home screen from where you turn ON/

OFF these connectivity options with just one touch. This is a very useful feature which defines connectivity in true sense for its users.

Instant search Not only is there a Google search tool on the Android phone home screen but it is also voice enabled.

This means you can just speak the content of your search and Google will do the rest. Apart from this there are two separate apps for Google search and voice search inbuilt into the Android phones.

Of course the fact that Android is Google's creation helps in understating such magic. On the other hand iPhone has no dedicated tool for search except a feature which allows you to search within your iPhone. Any search which needs web takes you to its browser Safari.

Seamless integration of data Android skilfully integrates information from various aspects of our lives like Facebook, emails, twitter, Flickr and much more and puts them together in your phone.

Additionally you can also choose to sync contacts from your Facebook and Google together into your contact book where all the pre-saved information like name, birthday, email address etc get automatically populated. This feature is totally absent in iPhone unless you use some third party apps.

Flash player Though the iPhone browser, Safari, is fast and smooth it lacks the capabilities to play any content which needs Flash player.

Android phones however support flash players on their browser and have the flexibility to play everything from videos to plain text in no time.

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of smart phones it would be interesting to find out some features where iPhone takes beating from Android-based smart phones:

AUTO TECH

What Goes Into a Mean F1 Machine?

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Have you ever had questions about the working and mechanisms of a Formula One car? Ever wondered how different is the engine of an F1 car from that of an ordinary one? On which fuel do F1 cars run? How long can the tyre of an F1 car last?

close to the composition of ordinary, commercially available petrol.

In old times, though, the cars ran on a mixture of powerful chemicals and additives that contained large quantities of benzene, alcohol and aviation fuel. Some early fuels were so potent that the car's engine had to be disassembled and washed in ordinary petrol at the end of the race to prevent the mixture from corroding it. The modern fuel is only allowed tiny quantities of 'non hydrocarbon' compounds, effectively banning the most volatile power-boosting additives.

The fuel available in 50 different blends can be different for different races as per the nature and demands of the track and weather conditions. During one F1 season, a team approximately uses over 200,000 litres of fuel for testing and racing. Talking about the tyre, an ordinary car tyre can last 16,000 kilometres or little more and a F1 tyre is designed to last for, at most, 200 kilometres.

The emphasis, like everything else in a F1 car, is to make it as light and strong as possible. An underlying nylon and polyester

structure in a complicated weave pattern is designed to withstand far larger forces than road car tyres.

Each team travels about 160,000 kilometres in a season between races and test sessions. The F1 drivers can lose up to three kilos of weight after a race due to extreme heat in their cockpits.

Hence, the drivers take in large amounts of water before the race, even if they do not feel thirsty, to avoid dehydration through sweating.

Most F1 drivers consume a diet similar to that of track and field athletes, carefully regulating the amount of carbohydrate and protein they absorb. During race weekends most drivers could be seen eating pasta or other carbohydrate-rich foods to gain energy and stamina. The F1 cars use carbon fibre composite brake discs which save weight and are able to operate at higher temperatures than steel discs. One disc weighs about 1.5 kg. The discs are capable of running at vast temperatures anything up to 750 degrees celsius.

A Formula One car takes less distance to stop from 160 km/h than a road car uses to stop from 100 km/ h. During the first phase of qualifying, any driver who fails to set a lap within 107 percent of the fastest Q1 time will not be allowed to start the race. However, in exceptional circumstances, which could include a driver setting a suitable time during practice, the stewards may permit the car to start.

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India has had a grand entry into the high profile and glamorous world of Formula One. Here is a guide to some interesting facts, a combination of information and rules about the sport. Revving to 18,000 RPM (rotations per minute), a modern F1 engine consumes about 450 litres of air every second with race fuel consumption of around 75 litre per 100 km. Such massive speed means that accelerative force on the pistons is more than 8000 times of gravity. As per the rules, each car can use eight engines per season. And if the rule is broken, the driver gets a 10 place grid penalty. As far as gearboxes are concerned, each car can use one gearbox to a maximum of four races.

Formula One's parent body, The Federation Internationale de l'Automobile (FIA) has also imposed a freeze on engine development, which means that teams are unable to alter the fundamentals of their engines' design. Talking about the fuel, its composition is actually quite

4 Ways Loans Turn Foul PERSONAL FINANCE

1 HOME LOANS BORROWING BEYOND YOUR REPAYMENT CAPACITY:

This is a common, cardinal mistake while taking a loan and applicable to both home and credit card loans.

"Many borrowers overestimate their repayment capacity while availing of home loans. They look to stretch their budget to accommodate, say a 3-BHK apartment when it permits just a 2BHK one," points out VN Kulkarni, chief counsellor with the Bank of India-backed Abhay Credit Counselling Centre.

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Since owning a house is a cherished dream of many Indians, stretching the budget is considered acceptable. They end up seeking a loan larger than required and the realisation dawns only when the EMIs start taking their toll on their finances. Ideally, one should estimate how much servicing capability one has and take loans accordingly.

"A ball park estimate for thiswould be 40-50% of take-home salary for home EMI. Over this, they will have to make arrangements for down payment as well as stamp duty, registration, any improvements to be done in this home, etc," Kulkarni adds. People should consider buying houses only when they can put in their portion of the money required and be able to service the EMI easily.

2 AVAILING OF TOP-UP LOANS: Similar is the case with furniture and

furnishings - a house is deemed incomplete without interior decoration. Several banks offer home loan top-up facilities and many fall for them, ignoring its implications on the outgo later.

These loans are typically closer to personal loans in structure, and thus carry high interest rate.

3 BANKING HEAVILY ON PAY HIKES: It is also not uncommon to see loan seekers overestimating potential salary hikes and bonuses while taking a loan. Ideally, repayment capacity should be ascertained primarily on the current earnings.

After all, the economic scenario may take a turn for the worse, scuttling any chances of a pay raise or even leaving you jobless.

Therefore, it is wise to be conservative rather than optimistic, and factor in only the present position while evaluating your EMI servicing capability.

"One should avoid being overleveraged during the good

times. Once one gets into the habit, he is not able to change during stressed times. A thumb rule is that your overall debt service ratio should not exceed 2.5 times (or 40% of your income)," adds Jayant Pai, VP, Parag Parikh Financial Advisory Services.

4 OVERDRAWING THE LIMIT: Before using your credit card, it is imperative to go through the 'most important terms and conditions' (MITC) posted on your card issuer's website. It carries a detailed description of various charges that can be levied. It also lists out finer points which can add to the dues if neglected.

"Many credit card users are not aware that their credit limit includes any charges levied by the bank. Therefore, if you are paying an interest on the earlier outstanding amount and yet use up the entire limit, the card issuer could levy overdrawing charges," informs Madan Mohan, chief counselor, Disha Financial Counselling Centre.

AUTO

Over 60 vehicles to be launched at Auto Expo 2012 in New Delhi More than 60 vehicles will be launched, including several global debuts, at the Auto Expo 2012 in New Delhi early next year despite the recent slump in the Indian car market, industry officials said.

The highlights of the show-the world's most popular auto fair attracting more than 2 million visitors, up from 1.2 million in 2010will be a new breed of sports utility vehicles and super bikes that will hit the Indian roads soon, officials said. Leading the pack will be Maruti Suzuki, the country's largest carmaker, which has finally woken up to the potential of SUVs in the country.

It will showcase a new 'made for India' five-seater concept SUV on the first day of the fair, signaling its intention to look beyond the ageing Gypsy and Grand Vitara models.

"It's the best bet from Maruti Suzuki

so far to tap the potential of younger customers," a top company official said. "Essentially an SUV, it will have the affordability of Maruti and durability of Suzuki," added the person, requesting anonymity.

A line-up of 1,000 different vehicles spread over 1.25 lakh sq metres will be on display, including at least a dozen new cars made specifically for Indian customers. Tata Motor, which stole the show in 2008 with its Nano, is looking at a repeat with three new global launches to be done by its chairman Ratan Tata.

Tata Motors has also lined up all new sedans, SUVs and concept vehicles from its Jaguar and Land Rover brand. In fact, Jaguar Land Rover has decided to skip the Detroit Auto Show, which overlaps with Delhi expo for three days.

After posting some stunning sales in China with it new range, JLR is betting high to unshackle the dominance of BMW Mini German players in luxury car segment. It is expected to bring its new sedan range and the DC100 concept from Land Rover.

Mercedes-Benz-GLK

Audi S6 There will be at least six launches in the luxury car segment including the Audi S6 and its smallest SUV Q3, BMW's new M5 Series and the Mercedes Benz GLK compact SUV. South Korean major Hyundai Motor is looking at getting its new small car and a compact SUV concept besides launching its new Sonata limousine.

Then there will be an array of superbikes entering the second largest market for two wheelers.

Triumph will mark its entry into India at the expo, while Harley Davidson will launch customised options for its bikes besides debuting new models.

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German carmaker BMW's small luxury car Mini, which will make its India debut at the show, and Bugatti, maker of the world's fastest car, are expected to be among the show-stoppers at the 6-day event starting on January 7.

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COVER STORY

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he pressures of Q2 was a bit too much - enough to separate the wheat from the chaff. While Q2 left many Indian banks shaken for ever, some of them held steady in the storm, and a few of them even managed to soar. Anyway Q2 is passé now. The greatest utility of Q2 numbers is in assessing Q3, Q4, and the fiscal to come. Close on the heels of Q2 came another game changer - deregulation of savings bank rates. While some bank chiefs were quick to disapprove of RBI’s wisdom, saying that there is no room for a savings bank rate hike, within hours things were proven wrong. A private bank took the SB rate all the way up to 6% - which was a stunning 2% hike within hours. Then another private lender followed suit, then they came in larger numbers. Today, the main newspaper ads by banks are about rate hikes. It is a great thing that RBI has given room for differentiation, perhaps for the first time in India’s banking history. Let this culture of differentiation flow into other sectors of banking too, so that the customer comes first, and since the customer comes first, shareholder value is protected. But the brunt of the RBI move is likely to be felt more by public sector banks, which hitherto had access to huge low-cost funds, which was thanks also due to the undifferentiated CASA deposits. It would be interesting to watch how various PSBs adjust to the new de-regulated environment on the deposit side. The story in nutshell from Q2 is one of soaring NPAs, soaring provisioning, and lacklustre growth. Even in some stories that present good headline numbers, we find that the numbers were managed on aggressive write-offs or upgrades of loans. But amidst the gloom, there were robust performances from Corporation Bank, Bank of Baroda, Karnataka Bank, & Karur Vysya Bank. Seasonal Magazine brings you a performance appraisal and what to expect in 12 banks. This is hoping that a double whammy doesn’t arrive by way of RBI re-thinking on its guidance of not upping the interest rates again. Indian markets can well take Moody’s downgrading or S&P upgrading, because the intelligent investors over here know what to take from such reports. We have a greater focus on PSBs this time. From investors standpoint, the reason is obvious. Stocks are best bought low and sold high. By high and low, what is meant is not the absolute prices, of course. Low as in low valuations, is what is meant. It is not always when you find more than half a dozen PSBs trading even below their book-values, with two of them below 0.80% of their respective BV. But does that mean those two banks - IOB & UCO - are the best bets now? Need not be. And does that mean, PSBs trading above their book are riskier bets? Again, need not be. In fact, this is what we precisely try to find out in this compilation - whether after Q2 and other recent developments - are these 12 banks shaken, steady, or soaring? India’s private banks are another story altogether.

With the cheapest among them trading well over 1.25 times its book, and the costliest one trading above 5 times its book, we feel there is little room for improvement, if not a large room for correction. But here also, we have included promising players like Karnataka Bank and Karur Vysya Bank.

ORIENTAL BANK OF COMMERCE

Asset Quality Conc Down OBC Q2 Net OBC’s Q2 results have come as a shocker to investors in the counter. Even while the PSB witnessed reasonable revenue growth of 27% year-on-year, OBC’s net profits took a serious dive of 58% YoY. While the profit drop was over higher provisioning, the bank seems to be under pressure in its noncore business as other income also fell by 8% QoQ. OBC had migrated to the RBI stipulated system generated NPA and provisioning model, but it can’t be fully said that the switch was the only reason. There seems to be serious pressure on asset quality, with both Gross NPAs and Net NPAs jumping seriously to 2.95% and 1.90% respectively. Total provisions more than doubled to Rs. 485 crore. Both overseas and domestic brokerage majors like Bank of America and IIFL are disappointed with the results, and a few brokerages and analysts have already downgraded the stock. The Earnings Per Share (EPS) has more than halved on a QoQ basis, while it is down to nearly one-third on a YoY basis. However, Chairman Nagesh Pydah has tried to explain the poor results as a one-off phenomenon owing to the migration to system generated NPA model, and has asked investors to watch out for the coming quarters where the bank is claiming to put on a much better show.

the bank, made up of veterans like Pydah, however realizes that the name of the game is not their welfare, but the welfare of their customers. In other words, a wider portfolio of services needn’t deliver, but a richer more value-for-money - offerings will never fail to deliver. During the past several weeks, top OBC leaders were at work with

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OBC to Overcome Challenges on a Wider, Richer Portfolio With yet another rate hike by RBI to fight inflation, and the double whammy of savings bank rates getting de-regularised, Indian banking sector is no doubt going through a tough patch.

For public sector banks, there is the additional concern of recapitalization too. New Delhi headquartered PSB, Oriental Bank of Commerce is rising up to these challenges by offering a wider portfolio of services. Under Chairman Nagesh Pydah’s leadership, OBC has recently entered lucrative businesses like General Insurance and Credit Cards. The top management of

Nagesh Pydah, CMD

their new partners in these business lines to ensure that ultimately OBC customers should win. One of the best examples is the recently launched Mediclaim Policy for OBC customers, in collaboration with Oriental Insurance Company. The salient points of this new Mediclaim is surprisingly attractive. All OBC customers up to 79 years of age are eligible for this health policy, that too without any health checkups required. Two policies are available - of Rs. 1 lakh and Rs. 5 lakh - and the scheme is a family floater with the beneficiary’s family also covered. The numbers are also attractive, with a Rs. 5 lakh policy costing just over Rs. 6700 a year. And needless to say, the OBC Mediclaim is a cashless

S.C.Sinha ED

offering. Is the public sector lender only aiming at bettering its feebased income over here? You bet not. Of course, for a bank which was not considering the general insurance business as a revenue earner, this is a significant change in stance with an eye also on revenue. But the real game over here is that OBC is eyeing at giving a jumpstart to its Current Account Savings Account (CASA) pool, which is one of the lowestcost funds available to Indian banks. The idea over here is simple - OBC will get more retail depositors just because of this attractive Mediclaim policy, which is available only for OBC customers. This move has now acquired added significance, after RBI recently de-regulating

V Kannan ED

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erns Drags Profit

savings bank rates. While most banks were taken by surprise and declared that rates won‘t go up, OBC was one of the first banks to declare that both deposit and lending rates are sure to go up.

Within hours the first salvo came, when an emerging private sector bank raised savings bank rates by 2%. What is now set to follow is a made race by all banks to protect their CASA turf, and if possible to invade others’ turf.

With innovative offerings like OBC Mediclaim, Oriental Bank of Commerce seems prepared to win this fight. Another innovative offering from the bank recently was a co-branded credit card with SBI Cards. Offered in Platinum and Gold versions, the OBC-SBI card is a high-tech one with an EMV chip embedded.

EMV stands for ‘Europay, MasterCard, Visa’, and this not only assures international acceptance, but ensures robust defence against most forms of credit card fraud. And that is not all. There is sheer customer value in both cards, with Gold Card offering effective cash-back of 2.5% for domestic supermarket buys, and the Platinum Card extending the cash-back to international spends too as well as a host of air travel benefits and auto fuel benefits. On the corporate credit front, OBC continues to facilitate old and new customers, small and large customers, troubled and robust customers. Recently, the bank took a proactive role in extending its existing credit helpline to troubled apparel maker Lilliput Kidswear by declaring its willingness for an extended repayment period. OBC was also an active syndication partner in the Rs. 1350 crore loan to a new JV between Bharat Forge and Alstom SA.

CORPORATION BANK

CorpBank Maintains Momentum by Balancing Innovation and Social Justice

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Corporation Bank is re-inventing itself these days with a definite aim to more than double its total business by 2014-15. But the real beauty is that this growth strategy is as much rooted in innovations as it is in social justice programs.

Innovations like urban financial inclusion and revolutionary MSME support programs all aim to deliver not just superior customer service, but superb customer value. These slew of measures by the bank’s top management team led by Chairman Ajai Kumar will also ensure that CorpBank sheds its southy image to assert a pan India presence and image. For capital market investors, this 10X wealth creator within 13 years is now available at attractive valuations.

Corporation Bank’s Q2 headline numbers were good, with total income up by 46.36% and net profits up by a healthy 14%, both year-on-year.

Provision Coverage Ratio stood at 84.72%, signalling prudence. Net Interest Income growth was decent, at 6.84%. Quarter-on-Quarter or

sequential growth was also positive on the income and profits front. Taking the first six months together, the rise in net profit was around 10%.

Business growth was led by deposits at 24.45%, and on the advances front, growth was at just 16.99%, keeping pace with

the industry. CorpBank added 14 branches and 6 ATMs during the first half. The PSB seems to be more focusing on increasing efficiency of its existing network and employees, and it has had successes on fronts like businessper-employee and profits-peremployee. Return on Equity

Ever heard of financial inclusion for the urban un-banked?

Probably not, but Mangalore headquartered mid-sized public sector bank, Corporation Bank, already has 76 Urban Financial Inclusion Centres, the latest one at Preethi Nagar, Bangalore, and is now in the process of opening a string of branchless banking centres in urban areas across the

country, branded CSVSK (Corp Shahariya Vithiya Samaveshana Kendra). The target groups are migrant labourers, construction workers, hawkers, helpers, domestic helps, drivers, cleaners, conductors etc. Smell a fairy tale?

No need, as CorpBank has some raw numbers to show - the nofrills accounts opened under their financial inclusion plan till now numbers 13.88 lakhs. Of

course, it includes CorpBank’s rural financial inclusion centres too, which are similar branchless banking centres branded as CGVK (Corp Grameena Vikas Kendra). But that every PSB is attempting, while on the urban front no other bank is as bullish as CorpBank.

But don’t for a moment be mislead that CorpBank is too much into the social commitment story, at the expense of growth. This PSB is so bullish on long-term growth that it has chalked out a formidable plan, which is however simple on break-up.

Start 200 new branches every year with each branch mandated to bring in Rs. 10 crore total business within the first two years.

The top management under CMD Ajai Kumar thus aims to take the current 1362 branches to at least 2200 branches by 2014-15. They know that the rest of the numbers will follow from Rs. 2 lakh crore business now to Rs. 5 lakh crore business then.

Ajay Kumar, Chairman

But one challenge for this lofty aim is that CorpBank’s branchorganizational structure needs an overhaul. The process may be painful, but it has already started. Now onwards, every 50 branches in an area will call for the creation of a new Zonal Office. CorpBank very well knows that banking is changing forever with the advent of new generation private banks, and that it calls for a more agile customer response, from not only the concerned branch, but from the Zonal Office up, if need be.

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(RoE) for FY‘11 was around 20%, ahead of many peers.

Putting its money by its mouth, CorpBank recently launched its Bangalore North Zone Office at Malleshwaram. 50 branches in and around this busy suburb of the Garden City has been carved out from the existing Bangalore Zone to create this new entity.

Appears superfluous? Maybe, until you hear the numbers Bangalore North Zone already accounts for Rs. 4400 crore total business. No wonder then that none other than Central Corporate Affairs Minister M Veerappa Moily flew in from New Delhi to inaugurate this prestigious new Zonal Office.

But Chairman Ajai Kumar is also using the strategy to shakeoff CorpBank’s southy image forever. Already in place is faster branch and zonal office rollouts in India’s booming West & North which leads the rest of the country in GDP growth. That is how Thane got a new Zonal Office recently.

This neighbouring city to India’s Economic Capital, is fast emerging as a growth zone in its own right, and CorpBank is aligning itself with such emerging urban dynamics.

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The bank is also upping the ante on providing not just superior customer service, but superior customer value.

Giving its MSME (Micro, Small, & Medium Enterprises) customers a shot in their arm, CorpBank recently tied up with Andhra Pradesh Small Scale Industries Association (APSSI) for a new enabling lending scheme by which small businesses approved by APSSI would be extended easy loans up

Corporation Bank’s Q2 headline numbers were good, with total income up by 46.36% and net profits up by a healthy 14%, both year-on-year.

Provision Coverage Ratio stood at 84.72%, signalling prudence.

Net Interest Income growth was decent, at 6.84%. Quarter-onQuarter or sequential growth was also positive on the income and profits front.

to Rs. 10 lakh with no collateral requirement. Initially launched in Vijayawada, Andhra Pradesh, it is likely that the scheme would be extended to the rest of the country.

The bank recently took the unusual step of opening a financial museum in its hometown of Uduppi. The museum which has come up in the home of the bank founder HajI Abdullah Saheb, who founded CorpBank in 1906 with a capital of Rs. 5000. According to CorpBank, this museum is a financial temple in the temple town of Udupi to demonstrate that what was possible with the right vision and a small capital.

CorpBank’s is indeed a growth story that is not missed by the stock market too. Between 1997 and 2010, the scrip had multiplied shareholder wealth by 10 times, but which is now available at extremely attractive prices as was the case in 2005.

But the valuations now are even more attractive, at just around 0.75 times its book-value and at less than four times its earnings.

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INDIAN OVERSEAS BANK:

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IOB Assumes Proactive Role in Industry, Even While Q2 Shows Continuing Momentum Indian Overseas Bank is now at the center-stage of the country’s banking industry, having recently hosted Bancon 2011 in Chennai from November 4th to 6 th. Done in association with Indian Banks’ Association, IOB’s proactive role in making the function a grand success was not missed by any.

During the second quarter of this fiscal, Indian Overseas Bank could grow its total income by an impressive 56.84% on an year-on-year basis, even though YoY net profit rise was modest . Evidently, higher provisioning on both non performing assets and standard assets took its toll during the quarter.

The higher provisioning was mandated by migration to system generated NPAs, which took place for IOB during the second quarter. The bank was also cautious in its guidance for the next quarter, when Chairman M Narendra indicated that a bounce back in net profit growth would have to wait for one more quarter, that is not until Q4 this fiscal. But investors are not likely to complain as this comes across as a one-off phenomenon, with both the revenue growth and interest income growth intact. Net Interest Income had grown by a robust 32.43% year-on-year. Despite the results, at least a few noted analysts reiterated their buy call on IOB stock, as the bank appears in a major growth phase. The PSB is in the process of recruiting 3500 more staff in a bid to jumpstart reaching its target of 3.50 lakh crore by end of Q4.

Expecting good credit growth, as RBI has given guidance for likely peaking of interest rates, IOB is approaching the government for a capital infusion of Rs. 1450 crore. The branch network is also being

beefed up to 3000 by March 2013, to capitalize on the deregulation of savings bank rates, and thus to regain CASA growth.

IOB’s Good Momentum Due to Various Initiatives The ongoing fiscal of FY’12 has not been an easy year for banks. But IOB is not letting that affect its momentum. This midsize PSB has a point to prove this year, as this is IOB’s Platinum Jubilee year. And the latest numbers from the bank show that it is celebrating its 75th year in style, by outperforming the banking industry. Sharpening its growth focus on all fronts, IOB outclassed industry’s 3.83% credit growth by its 15.02% surge during the March to September period. Deposits also outperformed peers, with IOB’s growth coming in at 13.75% against industry’s overall number of 6.26%. Under Chairman & Managing Director M Narendra’s able guidance, the bank is also in no mood to lose its momentum in the coming quarters and fiscals. For the next threeyear period, IOB has requested its promoter, Government of India, to infuse over Rs. 4000 crore in additional capital. If the government agrees, IOB is likely to go in for a preferential issue as against an FPO, and at these relatively low valuations, Government will be having an excellent deal by

investing further in IOB. Taking a pragmatic approach towards the recent interest rate hike by RBI, Chairman Narendra has made it clear that if the bank doesn’t increase the rates, it fails RBI’s very purpose, which is transmission of the higher rates to counter inflation.

At the same time this Chairman is in no hurry, as he cites the ample liquidity available in the banking system right now, which enables IOB to postpone it for a month, for the benefit its loan customers. IOB’s momentum started in earnest in FY’11, when it saw its loan book growing by 41% as against just 6% in the previous year. The momentum continued with net profit up by 51.71% in the first quarter. IOB has good market share in certain unique sectors, one of which is educational loans. The number of educational loans IOB delivers has grown by more than four-fold between 2006 to 2011, with the current disbursements being an impressive 48000 sanctions. IOB has clearly made good of the recent regulatory changes that allows sub-4 lakh loans with no collateral, and the widening of eligible courses from core professional degrees like engineering and management, to other volume sectors like teachers training courses. Priority sectors also get the proper attention from IOB, and this year alone the bank has sanctioned over Rs. 300

crore in agrarian loans. Despite an overall lull in credit growth, IOB is experiencing good traction in agriculture, education, MSME, & retail. The bank had recently come to the rescue of its MSME customers with increased repayment period, due to the difficult situation caused by inflation and the resultant rate hikes. The bank’s unique products for various sector include IOB Bhoomi Laxmi for buying agricultural land, IOB Sagar Laxmi for fisherwomen, and products like IOB MSME Plus, IOB Micro One, IOB NRI Plus etc. IOB’s new branch rollout of over 300 branches will also be dominated by un-banked and under-banked villages. Being in the Platinum Jubilee year, IOB is giving unprecedented care to its CSR programs, which already includes adoption of over 85 villages.

August was also celebrated as Kisan Month to accelerate agricultural loans. At the same time, IOB is strengthening its focus on lucrative overseas branches, by upgrading its representative offices in Guangzhou and Dubai to full-fledged branches, while new branches are being planned in promising cities of Africa and Middle East. Due to the market correction, IOB’s stock is ripe for picking, as the valuations are quite safe.

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M. Narendra Chairman and Managing Director

IOB is strengthening its focus on lucrative overseas branches, by upgrading its representative offices in Guangzhou and Dubai to full-fledged branches, while new branches are being planned in promising cities of Africa and Middle East.

INDIAN BANK

Indian Bank Q2 Amid Asset Quality Concerns

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Indian Bank’s Q2 numbers are reasonably good, with the topline growing by 20.6%, and bottomline or net profit growing by 12.7%, both year-on-year.

Growth came from all segments, with both interest income and non interest income putting up a good show. It was also a quarter in which income from its investments also kept pace. But amid the reasonable numbers, asset quality deterioration was evident with net non performing assets soaring by nearly 16% year-on-year to reach Rs. 1047 crore, YoY. The bank had already migrated to system generated NPA and provisioning scheme as stipulated by RBI, during the previous quarter. As such, this further deterioration in asset quality is of some concern.

While the PSB successful recovered its funds from many delinquent loans, the bigger problem was that fresh NPAs were generated. The bank needs to recapitalize, maybe not in a hurry, and it is likely to use its available headroom for Tier-II capital, rather than the announced FPO route due to the current low valuations.

Indian Bank Pursuing Efficiency in Funds, Excellence in Service Offerings

The impact of the prevailing high interest regime is not lost on Indian Bank. Under the leadership of Chairman TM Bhasin the bank is acting quickly to convert its pending $1 billion fund raise from the costly Medium Term Notes (MTN) to the cheaper Line of Credit facility extended by foreign banks.

Though it can’t meet the entire requirement, the $500 million LoC facility Indian Bank currently enjoys will be put to use, until the interest regime softens. The main advantage from this strategy, CMD Bhasin feels is that the public sector lender won’t be in a pressure to find suitable assets fast to deploy funds. The strategy seems sound as the credit

T M Bhasin, Chairman & Managing Director, Indian Bank receives the award for "BEST PUBLIC SECTOR BANK UNDER THE ASSET QUALITY CATEGORY" at the Dun and Brad street Polaris software banking awards 2011 on August 30 2011 at Mumbai

Good,

TM Bhasin, CMD signature based. Elimination of PIN input each time also adds to security of the card. Apart from discounts, offers, and rewards for the card usage at hotels and clubs, the new Indian Bank card also provides for privileged access to airport lounges. The new card is also truly international as it can be used in over 32 million merchant establishments in over 210 countries. The limit expansion has been generous with per-day cash withdrawal doubling from Rs. 25,000 to Rs. 50,000, while PoS spending limit has gone up four-fold, from Rs. 25,000 to Rs. 1,00,000. Existing cardholders of

Indian Bank can also apply to upgrade their cards to the Platinum Master Card. With such innovative products, Indian Bank hopes not only to shore up its CASA deposits, but increase service levels to best-in-class so as to attract the best retail customers. In the ongoing correction in stock markets, and especially Bankex / Bank Nifty, Indian Bank has shown better resilience than many of its peers, prompting some analysts to put a BUY on the scrip. The Indian Bank stock is also reasonably cheap now, trading around just 1.15 times its book and just 5.20 times its TTM earnings.

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growth situation remains challenging for all banks, and Indian Bank is in no hurry to grow by compromising quality of its assets. Again, a sound strategy for the emerging quarters when many banks are expected to report soaring NPAs. The Just-inTime (JIT) kind of nature that LoC provides will also enable Indian Bank to protect its Net Interest Margins, if not raise it marginally. However the challenging credit situation is not preventing Indian Bank from going all out in increasing total business, especially high-quality business. Proving the focus on the lucrative Current Account Savings Account (CASA) segment, the Chennai headquartered PSB has recently introduced their Platinum Master Debit Card. This product which is being offered in association with MasterCard, brings the bank’s debit card service to international levels. Apart from increased limits for both Point of Sales (PoS) and cash withdrawals, there are several technological advantages for the new card. The cumbersome requirement of entering Personal Identification Number (PIN) at each PoS is done away with completely, as the Platinum Master Card is

BANK OF BARODA:

BoB Faces Tough C in Urban & Corpora Q2 Headline Numbe

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Even while a few of its peers faced a negative turnaround, and many of them faced lacklustre growth, Bank of Baroda has once again proved that it is the strongest PSB stock, if not the strongest PSB. Q2 net profit is up by 14.4% on a year-on-year basis, while net interest income is up by 26%. Loans outperformed deposits, both on the domestic and global front. While urban and corporate sectors took a backseat this time, BoB outperformed on the rural and retail fronts. Like most banks, Bank of Baroda too struggled with corporate loans, but it was forthright in announcing that loan demand for greenfield projects had almost dried up. Yet, straight on the face of such a challenge, BoB focused on efficient disbursements for sanctioned loans, which seems to have achieved the good numbers for them.

The good show this quarter is also on the face of cost of funds going up, and the real performance was on the Net Interest Margin front, when NIM grew from 3.39% to 3.67%. The bank continued to vigorously

protect its asset quality by higher provisioning which now stands at 82%, even while NPAs slipped only marginally from 0.44% to 0.47% on a quarter-on-quarter basis.

From India’s International Bank, To India’s Financial Super Mall Struggling with the high-interest regime, most Indian banks are mulling overseas forays. Bank of Baroda’s case is a little different. With own subsidiaries in 8 nations, branch networks in 14 other countries including USA, UK, & China, and with joint ventures or representative offices in 4 other countries including Australia, Bank of Baroda is indeed India’s International Bank.

In other words, it is no mere brand tagline. On the domestic front too, BoB is in a unique position. Ask Chairman MD Mallya about current credit growth, and he would say it has slowed considerably. Ask him about asset quality, and he would say pressure signals on asset quality are already showing up, especially in the textile and steel spaces. But don’t be fooled. CMD Mallya is not speaking about the bank he heads. The veteran banker is also the Chairman of Indian Banks Association (IBA), and when he speaks cautiously, more often than not, it will be about the entire banking sector.

Try asking him about BoB’s own situation and

M. D. Mallya Chairman & Managing Director

you are likely to get buoyant answers. Ask Chairman Mallya about business growth this year, and he will promptly answer that it will be between 23 to 25%.

Compared to this, the overall consensus for banks is just between 18-20%. And even amidst the gloom ‘n doom environment about NPA shocks awaiting the Indian banking industry in Q2 and beyond, he will coolly assert that Bank of Baroda’s asset quality continues to be superior, and that beyond some incremental slippages, he is not expecting delinquencies to go beyond 1.25-1.30% this year.

And all these are not mere bravado. Ask any analyst worth his name to point out the most lucrative public sector banking stock, and the invariable selection is likely to be ’BANKBARODA’. And now with Moody’s cutting State Bank of India’s rating by one notch, BoB can be a ready pick even over SBI, as both PSBs are now equal in rating. It should be remembered that such preferences towards BoB by brokerages and research houses - both international and Indian - is despite SBI being more attractive

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Challenges ate Sectors, ers Good

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Rajiv Kumar Bakshi ED N S Srinath ED with M. D. Mallya, CMD

now with an over 47% year-todate fall against BoB’s 19% fall.

Incidentally, Bank of Baroda is the least corrected PSB stock in the year-to-date with 24 out of 25 peers performing badly than BoB. While most banks are now sweating it out on the issue of migrating NPA generation to a system driven one by Q2 results time, to comply with an RBI regulation, BoB has already achieved the same in the June quarter itself. Not partial implementation like a few peers, but full implementation. Now, when other banks are following BoB’s path to expand abroad, this bank’s top management is charting out on a new positioning in the Indian market. The ambition is to be India’s Financial Super Mall. Each branch of BoB will be grown to a stature befitting a financial mall, where not only conventional products like vanilla deposits and loans are served, but a whole gamut of financial services including life insurance, non-life insurance, mutual funds, credit cards, collection services, internet banking, mobile banking, NRI

Ask any analyst worth his name to point out the most lucrative public sector banking stock, and the invariable selection is likely to be ’BANKBARODA’.

And now with Moody’s cutting State Bank of India’s rating by one notch, BoB can be a ready pick even over SBI, as both PSBs are now equal in rating.

services, and a branded retail product portfolio aptly titled GenNext Services are delivered to customers without hassles. The thoughtfulness that has gone behind designing each Gen-Next Service is remarkable. While GenNext Power is a unique savings bank product with overdraft facility, Gen-Next Lifestyle is a flexible term loan for buying furnishings, appliances, or gadgets. Due to MD Mallya’s additional role as Indian Banks Association Chairman, BoB is getting to play a central role in policy formulation too. Recently it was under BoB Chairman’s leadership that a team of Indian banking’s who-is-who - Pratip Chaudhuri of SBI, KR Kamath of PNB, MV Nair of Union Bank, Chanda Kochhar of ICICI Bank, and Aditya Puri of HDFC Bank - met RBI Governor and conveyed to him in no uncertain terms the difficulty banks were facing to grow credit, as well as how the high-interest regime is affecting the capex plans of most Indian companies. It was another feather in the cap for Bank of Baroda, when RBI Governor recently gave the guidance that further rates hikes may not be necessary.

SPORTS

Lack of Good Bowlers Felt in Ranji

his is reflected in performance as matches are dominated by experienced batsmen, who are exposed to a higher level of cricket. Manoj Tiwary, Suresh Raina, Parthiv Patel, Robin Uthappa, Rohit Sharma and Abhishek Nayar don't usually struggle at this level. On placid pitches and against ordinary attacks, they switch on and score big. Virat Kohli, however, has missed out because he is sitting on the India team bench.

Karnataka's Manish Pandey and Rajasthan's Ashok Menaria, having scored impressive double hundreds, are this season's hot new stars. Both are products of post-IPL Indian cricket - fearless, aggressive, not ones to dawdle at the crease. They are students of Virender Sehwag's school of cricket where the curriculum mandates that batsmen must score runs as fast as possible.

Whether, and when, the likes of Pandey and Menaria step up to the next level is difficult to tell. Others are ahead of them to make it to the India team and there is also the question of passing the ultimate quality control test of demonstrating the ability to handle pace and the moving ball. It is one thing to hit through the line or whack a spinner out of the ground, quite another to play on lively tracks and handle bowling that is consistently threatening.

Surprisingly, this Ranji season, bowling resources are worryingly barren. Off-spinners are almost extinct and Harbhajan Singh (400 Test wickets, the fourth-most successful spinner in cricket history after Muralitharan,

Pankaj Singh Jaidev Unadkat

Vinay Kumar

Manpreet Gony

RP Singh

A Mithun

L Balaji

Ashok Dinda

Shane Warne and Anil Kumble) has taken just two wickets in three games. With batsmen easily putting away balls turning into them, left-arm spinners are the first choice when it comes to picking spinning options in the playing eleven.

Nothing much has changed for the fast bowlers who continue to be defeated by the conditions and opposing batsmen. Pankaj Singh, Manpreet Gony, Ashok Dinda, Jaidev Unadkat, A Mithun, L Balaji, RP Singh and Vinay Kumar have had their moments but in the context of Ranji and dead tracks, they exist only to take the shine off the ball and suffer punishment.

(By Amrit Mathur, CEO of Delhi Daredevils)

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With three rounds of Ranji Trophy completed, the season seems to be playing out no different from the previous years.

Senior pros think the players are more focussed and competitive but the overall quality of play shows no improvement. With 27 teams in the fray, it is difficult to separate the mediocre from the meritorious.

KARNATAKA BANK

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Karnataka Bank Plans to Outperform Peers,

By Thrust on Retail Services Karnataka Bank is gearing up for a 25% business growth this year, unfazed by the slowdown in credit growth, and projections of several peers. The private sector bank is currently not burdened by the issue of recapitalization like similar sized public sector banks. The Mangalore headquartered traditional private sector bank has enough headroom of over Rs. 350 crore in Tier-II capital. But with corporate credit growth showing sluggishness, Managing Director P Jayarama Bhat is focusing on increasing retail business. Gold loans, a retail sector in which the bank showed 100% growth in last fiscal is given special focus this year. Four other retail segments will also witness above average growth at Karnataka Bank, this year viz. home loans, auto loans, mortgages, and agricultural loans. Retail funds are being eyed through a renewed thrust on Current Account Savings Account (CASA) deposits. One method Karnataka Bank has for this the lucrative Point of Sale (PoS) business. Mobile banking services are soon to be commissioned and this highgrowth area will aid the bank in its quest for retail growth. The bank recently procured and installed a state-of-the-art software system for ASBA (Application Supported by Blocked Amount) that enables its customers to subscribe for public issues in a risk-free, hassle-free manner. CASA deposits is being given a target of over 26% from the last

P Jayarama Bhat, MD & CEO

rate hikes to both deposit and credit customers, Jayarama Bhat is on a wait-and-watch mode rather than acting hastily.

Karnataka Bank which saw substantial correction in its share price during the ongoing unwinding in the capital markets, is now not only one of the most attractive private sector banks, but one of the most safe among all banks. The scrip trades at just 0.61 times its book value, which has prompted several analysts to call for HOLD and BUY calls on the scrip.

Karnataka Bank Delivers Robust Numbers in Q2 Karnataka Bank has delivered what is one of the best quarterly results among all banks, private and public. Net profit is up by

more than 43%, while net interest income is up by more than 33%, both on a year-on-year basis. With this, the bank has successfully wound up a half-year that saw a net profit growth over 20%. The magic seems to come from better operating profit, mainly from healthier yields on advances, even in a climate that witnessed higher cost of funds. Net Interest Margin reached 2.20% from the year ago figure of Rs. 1.96%. Not surprisingly, most analysts have given a buy call on this private sector banking scrip, post Q2 results. The only concern was on the NPA front, where some slippages were visible, but MD & CEO P Jayarama Bhat is of the view that the slippages are largely of a temporary nature and would go away with an upgrading process that the bank would undertake. The bank is definitely on a growth trajectory, and Bhat is confident about the business target it has eyed for the fiscal, Rs. 54,000 crore, to be easily reached. Point of Sales and Online Trading are newer growth areas where the bank is making inroads. Karnataka Bank has also embarked on an ambitious project of Business Process Reengineering (BPR) to be undertaken by international consultancy major, KPMG, over the next six months, that would make the bank as competitive as many of its newer generation peers.

Bhat is also bullish about the recent RBI deregulation of savings bank rates and opening up of branches in Tier-II cities, as he feels that Karnataka Bank has the strategy to make good of such policy measures.

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fiscal’s 23%, so that this private sector lender’s competitiveness is enhanced visà - vis public sector peers that have a natural edge on this front.

Apart from conventional business boosting measures like branch expansion, Karnataka Bank is all set to deliver new-age add-ons to savings bank accounts like special-purpose cards for travel and gifting.

Branch expansion will witness 15 more branches that will take this largely South based bank over the landmark 500 branches. If plans go well there will be 500 branches by the end of this fiscal, and in a realistic outlook, the bank is focusing more on neighbouring states, especially Andhra Pradesh, rather than sweat it out in the North or West where competition is too high. The bank is confident of garnering at least 5.5% of total business from the neighbouring state, which will amount to a handsome Rs. 3000 crore. On the issue of passing on the interest

PUNJAB NATIONAL BANK

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PNB Q2 Reveals Asset Quality Deterioration Headline numbers were good in Punjab National Bank’s Q2 results, with total revenue up by 22.5% and net profit up by 12.1%. The business growth was more on the deposit side rather than on the advances. However, the crucial low cost CASA deposits took a 200 bps hit in the quarter. It is significant that this has happened even before the RBI deregulation of savings bank rates took effect, which is expected to add further pressure on PSBs’ hitherto safe bastion of Current Accounts Savings Accounts (CASA). The bank’s numbers also took comfort in the higher growth on the non-interest income front. But the real shocker was in the asset quality. The second largest public sector lender finally acknowledged during the quarter, what many analysts had repeatedly cautioned regarding PNB’s exposure to State Electricity Boards. Restructured loans jumped during the quarter, and now stands at 8% of all loans made by the PNB, which is a record high among all banks. Around 50% of the restructured loans are to the troubled power sector, with one worrisome short-term loan of Rs. 1750 crore getting converted to a 5-year loan. NIM has slipped marginally, and is likely to be pressured by the expected pressure on CASA deposits. Though slippages were largely contained in this quarter, it is significant that much of the new slippages happened from the already restructured books of PNB. The bank was also seen struggling to contain operating expenses with employee expenses up by 11% and other operating expenses up by 19%. Profitability took a hit as provisioning was up by 28.9%. The widely expected positive re-rating in the stock is less likely to happen now, unless asset quality improves, which is however more dependent on the troubled power sector getting a reprieve through government policy. A few analysts have already cut price targets for the bank.

PNB Fights Tough Environment With Overseas Forays, Sharper Efficiency When Indian banks timidly opens overseas representative offices, Punjab National Bank is buying out whole banks overseas. That is the difference in the scale of operation between the India’s second largest public sector lender and many smaller, or even private sector peers. The overseas thrust that began in

K.R.Kamath Chairman & Managing Director

Rakesh Sethi Executive Director

Usha Ananthasubramanian Executive Director

betting on one or two or three markets alone, but strengthening its overseas presence across the world. Canada will soon witness a wholly owned subsidiary by PNB, China and Norway will see PNB representative offices being upgraded to branches, while other nations with PNB branches like Hong Kong, Dubai, Afghanistan etc will soon be followed up by nations like Singapore, Brazil, Bangladesh, & Maldives.

However, all these overseas forays are not by losing the Indian focus even a bit. Even in a cautionary environment for domestic credit, PNB continues to be bullish on select quality projects. Recently, it participated as the largest participant in the Rs. 1310 crore

syndicated loan by 8 banks to infra major, Jaiprakash Associates, by pledging Rs. 500 crore, even ahead of lead arranger of the loan, Axis Bank who provided Rs. 100 crore. And when it comes to supporting troubled public sector undertakings, PNB’s support has been second to none. PNB is a lead supporter of the whopping Rs. 22,000 crore bank loans extended to troubled national carrier, Air India, by which the airline is paying fuel bills and salary, and PNB is even open to the Air India’s proposal to convert these working capital loans to long-term loans, provided that Finance Ministry provides a Letter of Comfort regarding AI’s creditworthiness.

PNB’s commitment to the priority sector is also outstanding, with the best example being the Mega Recovery Camps for small agricultural loans below Rs. 10 lakhs. Unlike the name suggests these camps are more about part waivers and rescheduling of instalments for farmers in distress.

PNB has one of the largest agricultural loan book that now stands at Rs. 34,000 crore.

Delivering better value for retail investors in urban areas is also getting focus at PNB, with one example being the PNBRewardz.com program which offers loyalty benefits for debit card owners.

Even in a cautionary environment for domestic credit, PNB continues to be bullish on select quality projects. And when it comes to supporting troubled public sector undertakings, PNB’s support has been second to none. PNB is a lead supporter of the whopping Rs. 22,000 crore bank loans extended to troubled national carrier, Air India.

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earnest with the January 2010 setting up of Druk PNB Bank Ltd in Bhutan with a 51% stake, was followed up in December 2010 with a 63.64% stake takeover of JSC Dana Bank of Kazakhstan.

Now, in October 2011, less than a year later, PNB has identified its next overseas target - Kist Bank of Nepal, which it will take over by acquiring a 51% stake. The Nepal foray is special, as PNB already has a joint venture in this neighbouring state of India - in Everest Bank Ltd - in which PNB holds a 20% stake now, through a partnership that began almost 20 years ago. Like some Western banks, a few banks in Nepal have been finding the going tough, and the unconfirmed news is that Nepal’s banking regulator, Nepal Rastra Bank, is open to the idea of PNB eventually merging Everest Bank and Kist Bank, and holding it as a majority owned subsidiary.

But don’t ever think that Punjab National Bank is only active in neighbouring countries like Bhutan, Nepal, or Kazakhstan.

PNB has significant presence in one of the most lucrative markets for Indian Banks - the United Kingdom - with Punjab National Bank (International) Ltd (PNBIL), its wholly owned UK subsidiary now owning 7 branches, with 2 in the world’s financial capital of London. Now, PNB is all set to duplicate its UK success with another emerging and lucrative market for Indian lenders, Australia.

PNB’s first representative office only the fourth by any Indian bank in Australia - was opened recently in Sydney. PNB Chairman KR Kamath would have preferred to open a full-fledged branch, but which will take some more time due to Australia’s regulatory hurdles. With India-Australia annual trade figure soaring past the Rs. 1,00,000 crore figure recently, this is one overseas foray that can reap good dividends for PNB in the years to come. But PNB is not

BANK OF INDIA:

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BoI Fights Challenges Through Innovations If ’Bank of India’ was a sobriquet, it would have been a heavy one for Bank of India Ltd. As a moniker it would be more fit for Reserve Bank of India, or at least State Bank of India. But for the visionary Mumbaikars like Sir Sassoon J David and Ratanjee Dadhabhoy Tata and their compatriots who came from diverse national and international communities to establish their new bank as ’Bank of India’ in 1906, the ambition was clear enough. The fifth largest position among all public sector banks, by way of asset, revenue, profit, as well as market cap, is not bad. But can Bank of India really live up to the sobriquet in the years to come? One hint for it comes from the age old saying, ’necessity is the mother of invention’. Bank of India is finding itself in a challenging position these days. As per a recent research report by a leading domestic brokerage, which was done after an interaction with bank’s officials, there are a few trouble-spots that

present challenges in the months and quarters to come. But if brokerage reports are all about numbers, Bank of India’s fightback to regain robustness and possibly claim its rightful position among all PSBs is driven by a slew of customer-centric

BoI is one among the only four Indian banks to have a presence in China, which many observers identify as the market to be in 2010-20. Recently BoI entered the New Zealand market with a branch in Auckland, which will initially target Indian exporters and expatriates.

innovations, all under the guidance of Chairman Alok Kumar Misra, one of India’s most experienced senior bankers.

Bank of India recently gave its Micro, Small, & Medium Enterprise (MSME) customers a big boost, when it tied up with

Alok Kumar Misra, Chairman

had bet on this once highflying brand. Bank of India has also been in a wait-and-watch mode regarding the question of passing on the recent interest rate hike to customers. According to top officials of BOI, credit quality may suffer due to swift action, and they are pausing that action to see whether they can contain the hike themselves. Of course, the flipside of it is that deposit rates also will remain untouched, but the bank thinks that unless it is absolutely necessary, it is better to contain fund costs as well as lending rates. Meanwhile, Bank of India is taking the country’s flag to more countries across the globe. BoI is one among the only four Indian banks to have a presence in China, which many observers identify as the market to be in 2010-20. The year 2010 was that special year in which China emerged as India’s largest trading partner, unseating United States.

Recently BoI entered the New

Zealand market with a branch in Auckland, which will initially target Indian exporters and expatriates. Aligning with the banking sector’s newfound thrust on retail banking as well as CASA deposits, Bank of India recently unveiled a high momentum strategy - roadside kiosks to attract passers-by to become new account holders.

The strategy that got kick-started to good momentum in Hyderabad, may soon be tried all over the country. But for those who think that going that far - to the streets literally - is sacrilegious, be aware that Bank of India takes security issues seriously. Perhaps most seriously among all public sector banks.

The proof came by way of a recent award for Best Security Implementation 2011. BoI is the first PSB to implement the Virtual Private Secure Internet (VPSI) solution that offers 2FA (two-factor authentication) and military grade encryption, and also protects customers from cyber fraud, phishing attacks, and other malwares. On the front of managing funds and resources, Bank of India is showing utmost caution, again in tune with the challenging times affecting the entire industry.

Recently it decided to go slow or even review its plans to acquire a controlling stake in Bharati AXA Investment Managers, a leading asset management (mutual funds) business. While the bank is bullish on the mutual funds business, BoI seems to be rightly feeling that the valuations have come down significantly, and that it is entitled for a significantly cheaper deal from Bharati AXA or other asset managers that are open to stake sales.

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SEBI approved rating agency, Brickwork Ratings, for such customers to get their businesses rated by the agency so that these small businesses also come up to the accounting and management standards followed by blue-chip companies. If Government of India is taking special care to nurture MSMEs these days, this state-run Bank is at the forefront of implementing government’s vision. Understanding the difficult situation facing some bigger customers due to various reasons, Bank of India is extending maximum possible support as well as co-operation with co-lenders. The best recent example was Bank of India’s proactive role in restructuring the Rs. 660 crore debt of the troubled apparel manufacturer and retailer, Koutons, which was syndicated by ten banks. The recently concluded restructuring deal not only breathed some life into Koutons, but into the portfolios of many investors who

BoI Q2

Bank of India’s Q2 Shows Hidden Strengths

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There is no doubt that Mumbai headquartered public sector bank, Bank of India, has had a difficult time in Q2 of this fiscal. Some of the headline numbers weren’t good, with net profits declining by over 20% year-on-year. But looking closely, it can be seen that almost all of the drop has come by way of higher provisioning requirement due to migration to system-generated NPAs, that Bank of India undertook during this quarter. However, BoI displayed strong growth in overall business, with deposits growing by over 24%, and advances growing by over 18%, which is comparable to best performances from the sector during this quarter. The crucial metric of Net Interest Margin (NIM) improved to 2.44%, as BoI made good of the rise in yield on advances as well as better yield on investments. This is commendable, as this performance was against the

B.A. Prabhakar, Executive Director

formidable wall of the prevailing high interest regime which saw many of its peers digressing on NIM. Robust performance was also seen in Other Income growth, with treasury income jumping by nearly 41% sequentially, and fee income growing by 19%, both on a sequential basis. What this shows is not only that the bank is properly hedged against the tightening regime, but that it is getting good traction in non-core

N. Seshadri, Executive Director

areas like specialised services, which has been something of a forte for private sector and MNC banks. Bank of India’s capital adequacy ratio now stands a tad short of 12%, and the PSB has requested its promoter, Government of India, for fund infusion of around Rs. 1000 crore for re-capitalization. Chairman Alok Kumar Misra is confident that post the NPA migration, performance in the upcoming quarters would be more robust, and this veteran banker is also confident that NIM would improve further to 2.6% by FY’12 end. Regarding risks emanating from accounts like Air India, Kingfisher, State Electricity Boards etc, the bank recently informed that strict norms would be forced for restructuring like promoters bringing in more equity. Bank of India scrip is trading very attractive now, at just over its book-value, and just over 8 times its earnings.

SYNDICATE BANK

Syndicate’s Profits Jump, But Pressure Seen on Margins, NPAs There were significant slippages, with NPAs rising from Rs. 917 crore to Rs. 1052 crore. The bank completed its switching over to system-generated NPA structure during this quarter.

However, NPAs as a percentage decreased marginally to 0.93%, aided by aggressive write-offs as well as upgrades.

Soham Renewable Energy. The Karnataka based PSB would need to be recapitalized by Government of India in this fiscal itself. The bank is on the watch-out for any troubles on the home loan front, and has recently reiterated its support to Government’s call for extending home loan tenures to 25-30 years, or up until the borrower is 70 years of age.

Basanth Seth, Chairman

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Syndicate Bank has delivered a good set of headline numbers for the second-quarter. Net profits are up by 36%, and total income is up by a similar figure of 35%. But looking closely, the jump in net profit is also due to lower than expected effective tax-rates. While Net Interest Income growth was good at 18.5%, Other Income growth was sluggish at just 5.6%.

Margin pressure is evident, with NIM slipping by 11 basis points.

There were significant slippages, with NPAs rising from Rs. 917 crore to Rs. 1052 crore. The bank completed its switching over to system-generated NPA structure during this quarter. However, NPAs as a percentage decreased marginally to 0.93%, aided by aggressive write-offs as well as upgrades. The crucial CASA ratio slipped by more than 430 bps, as the growth in these low cost deposits was quite muted. Gross NPAs remained high at 2.4%, while provision coverage ratio at 78.5% ensures some shock-proofing.

Loan growth at just 18.9% lagged deposit growth at 21.5%. The bank has a troubling exposure to the grounded cargo carrier Deccan 360, which is nearing a CDR process. Still, the bank is participating in big-ticket syndications like the recent one for

KARUR VYSYA BANK

KVB Puts On a Good Q2 Show

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Karur Vysya Bank’s consistent performance continues even in these troubled times. While net interest income jumped by an impressive 49%, net profit rose by a decent 10.44%, both year-onyear. The divergence between the income and profits was largely due to the high interest regime that is pressuring the margins, and is likely to moderate going forward, as RBI has guided that further rate hikes may not be necessary.

Operating profit increased by only 8.7%, revealing that KVB could effectively contain expenditure growth. The sixmonthly increase in net profit is still an impressive 23%. Deposits were up by 28%, even while advances outperformed with a 32% growth, and the traditional private sector bank crossed another milestone - total business of Rs. 47,000 crore. When most similar sized private and public

peers were struggling with asset quality, Karur Vysya Bank’s Gross NPAs could be contained to 1.48% from 1.55% a year ago, on a sixmonthly basis. Net NPAs have jumped from 0.16%, but is still at an impressive 0.29%, which many banks can only dream of. No wonder then that KVB stock has resumed its upward journey after the sharp fall caused by the correction in general markets and banking stocks in particular.

K. Venkataraman, MD & CEO

KVB to Soar in New Age, On Age Old Principles the country. Capital adequacy ratio is hovering near 15%, well above RBI stipulated 9%. A financial institution that has grown its net owned funds of Rs. 1 lakh at inception to over Rs. 2370 crore now. All that speaks of only one thing - what KVB has been following might be old-fashioned styles, but they were definitely the most prudential norms in banking.

That banking wisdom and steady investor return is what attracted celebrity investors like Rakesh Jhunjhunwala to KVB long back.

Legend has it that KVB has been one of the most fruitful stocks for India’s Big Bull. Anyway, KVB is changing. The bank has rightly identified that in order to grow further, the it has to embrace some new styles also. Boston Consulting Group, one of the most respected international consultants was brought in. But even before that, KVB had embarked on a transformational journey. For shedding its image as a Tamilnadu bank, the first step was taken long

Katta Pradyumna Kumar, Chairman back, the first fruits of which are ripe now. Already 50% of KVB’s branches are outside this South Indian state. Now, the ambition is to go pan India. The projected growth number hints at planned super efficiencies. The current deposits are Rs. 27,000 crore and advances are at Rs. 20,000 crore.

With a doubling of branches from 400 to 800, KVB is aiming to triple its total business from Rs. 47,000 crore now to over Rs. 1,25,000 crore by 2016, which will also be its centenary year. No wonder then that it is not only domestic investors like Jhunjhunwala who are bullish on the stock, but many foreign institutional investors.

KVB recently agreed to up its limit for FII participation to 35%, in consultation with RBI. The bank

Pat for KVB: The Tamil Nadu Governor, Dr K. Rosaiah, greets the Chairman, Karur Vysya Bank, Mr K.P. Kumar, on the occasion of Karur Vysya Bank’ Founders Day ’ Celebrations in Madurai. The Managing Director and Chief Executive Officer, Mr K. Venkataraman (extreme right), is also seen. — Photo: S. James

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Karur Vysya Bank is often classified by the banking industry and capital markets as a traditional private sector bank. The intention of this typecasting is simple enough to understand - KVB is not a new generation private sector bank like ICICI Bank, HDFC Bank, Kotak Mahindra Bank, or Yes Bank. But is this a drawback or an advantage? At KVB, Managing Director & CEO, K Venkataraman thinks this is an allout advantage. Is he that experienced at KVB to make that judgement?

Venkataraman assumed charge as MD & CEO of KVB only months back, in June of this year. But for a senior banker with more than three decades in banking, this advantage was not difficult to understand. The stats speak for themselves. A profit maker ever since inception. An uninterrupted dividend payer since inception. For the last three years, dividend has been 120%.

Net non performing assets at end of Q1 is 0.21%, one of the safest in

M.G.S.Ramesh Babu

V.Santhanaraman

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is nowadays regarded as a top pick by discerning mutual funds, with the most recent example being DSP BlackRock Mutual Fund, which bought it along with bluechip heavyweights like Bharti Airtel, HDFC Bank, TCS, & ITC. Professional fund managers are attracted to the bank also by a secondary reason - the bank is professionally managed with only 3.27% of promoter holding, making it one of the most attractive takeover targets.

CEO Venkataraman believes that more competition by way of more banking licenses - this time to large

Dr. S. Krishna Kumar

S. Ganapathi Subramanian

K P Rao

A J Suriyanarayana

G. Rajasekaran

K. Ramadurai

corporate players - would only benefit the industry and players like KVB. Venkataraman joined KVB from his last assignment as MD & CEO of SBI Global Factors Ltd. One secret for his bullishness on KVB’s outlook is that it already has a headstart in rural banking, which is nowadays touted as the next big wave in Indian banking. Around half of KVB’s branches are in the rural sector. It is a headstart uncommon for a private sector bank, let alone new corporates mulling an entry into the banking sector. But that doesn’t mean KVB is putting all its eggs in one basket.

Commendable feat: Union Minister for Corporate Affairs M.Veerappa Moily handing over the CNBC-TV 18 award to Karur Vysya Bank MD and CEO K.Venkataraman in Mumbai on Monday.

Upon the findings of Boston Consulting Group, the bank is making several strategic changes to its organizational structure, to bring it at par with bigger and more modern private sector banks.

Customer value is being beefed up to unprecedented levels. One recent example is KVB’s introduction of flight ticket & rail ticket booking, right inside their ATMs. It became the fourth and only private bank to offer this, behind SBI, PNB, & BoB. The bank today has an ATM network of 600 machines, which is also being expanded. Such innovations and core performance has made KVB one of the most award-winning banks in this year, with more than four top awards in its kitty. KVB is also planning a big push into the branded credit card segment in association with SBI. KVB and BCG has identified housing loans as another bullish sector in the near future, and is planning a more momentous foray here. KVB Shakti is another innovative savings product that has enough firepower to attract women customers. KVB’s resilience is evident from its stock performance, with the month-to-date returns amazingly being in green, during a period when bigger private and public banks lost major ground.

CANARA BANK

Canara’s Profits Slump as NPAs, Provisioning Soar

Gross NPAs as a percentage is up from 1.49% to 1.73%. The fall in profits is despite a record jump in cash recoveries, which stood at Rs. 800 crore during the quarter. One reason seems to be the higher provisioning requirement brought forth by more bad loans. Provisions during the quarter soared by more than 250% to reach Rs. 553.11 crore. Growth in income was stronger in non-interest income than in core interest income. The bank’s aggressive stance in garnering deposits came at a high cost, with total expenditure up by 47% and interest expenditure up by 58%. It remains to be seen what would be the jump in interest expenditure from now on, as RBI has recently de-regulated savings bank interest rates, and with a few private banks having already upped the ante on PSBs like Canara by hiking savings bank rates by up to 2%. Advances grew slower than deposits, and clocked a growth of 23.8%. Reflecting the results and based on Moody’s downgrading of Indian banks,

S Raman, Chairman

Canara Bank scrip has started correcting, which is expected to gather momentum. If RBI doesn’t stick by its guidance to not increase interest rates further, due to the persistent inflation, it will be a double whammy for already pressured PSB stocks like Canara.

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Canara Bank’s net profit is down by 15.44% on an yearon-year basis, unlike many of its peers who managed at least modest growth in the second quarter. The bank attributes the fall to migration to system-generated NPAs during this quarter, but then the question is why the halfyearly profits have also fallen by nearly 22%. Net NPAs rose by an alarming 67.61% to reach Rs. 3116.99 crores.

DHANLAXMI BANK

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Dhanlaxmi Q2 Signals an Emphatic Turnaround, Enough to Silence Critics Mid-sized private sector lender, Dhanlaxmi Bank, has given a strong signal of positive turnaround in performance, with both income and profits growing strongly in Q2, both on an year-on-year and sequential performance. Total income was up by an impressive 79.10% YoY, and by a decent 10.80% on a quarteron-quarter basis. The jump in net profit was stunning at 168% on an year-on-year basis, but was that huge due to the low base formed in Q2FY’10. But net profit grew sequentially too, by an inspiring 27.94%, which is a performance many of its comparable private and public sector peers couldn’t come up with during this last quarter, which was marked by interest rates tightening further and credit demand languishing. Growth in ad-

vances at 44% kept pace with growth in deposits at 45%, which are again more than impressive growth metrics compared with many peers. In fact, RBI has recently cautioned Dhanlaxmi Bank from growing its loan book too aggressively, and asked the bank to limit it to a maximum of 25% in FY’12, and to focus more on direct advances rather than portfolio buyouts.

Dhanlaxmi’s fixed deposits continue to be one of the most attractive in the industry, with their 300 day FD offering 10% interest. Despite the intense pressure on margins experienced by the entire industry, Dhanlaxmi Bank could increase its Net Interest Margin to 2.20% from 2.00%. The bank’s focus on improving fee based business paid good dividends in this quarter too, as

non-interest income surged by 21%. The bank introduced as part of this plan, a forex card for international travellers during this quarter, which was well received. The bank also made best use of the prevailing mood, by pushing its gold retailing business, with Q2 sales of gold coins and bars passing the impressive 100 kg mark. Non performing assets were managed on a war footing, and the results were evident, with Gross NPAs falling by 56.35% to reach a very comfortable GNPA ratio of just 0.55%. The bank is proactively responding to all changes in the business environment, and its top officials has remarked that the recent hike in FII bond limit is a welcome move as it will boost the investment climate.

Another top official in charge of the

Amitabh Chaturvedi, MD & CEO

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The bank’s focus on improving fee based business paid good dividends in this quarter too, as non-interest income surged by 21%.The bank introduced as part of this plan, a forex card for international travellers during this quarter, which was well received.

The bank also made best use of the prevailing mood, by pushing its gold retailing business, with Q2 sales of gold coins and bars passing the impressive 100 kg mark.

subject has commented positively on both the interest rate hike and savings bank deregulation, even while expressing caution due to both these in near-term profitability of all lenders. A recent report by Dhanlaxmi Bank think-tank on capital formation in the country was well appreciated in the industry, and this study had found that for India to return to a high growth trajectory, the country requires investments at the rate of 40.5% of GDP, which is not happening now. The bank has completed an accelerated implementation of state-of-the-art IT infrastructure, for which it won a recent national level award. Dhanlaxmi Bank is soon going in for a major recapitalization drive to get itself ready for the next round of credit growth as and when it happens. The bank, under the able leadership of Amitabh Chaturvedi, MD & CEO, has vigorously and successfully defended allegations of bad numbers in the company’s books, and now with RBI too looking into the matter and providing Dhanlaxmi with healthier guidelines, it can be hoped that better times are there to come for the bank and its stock.

INSPIRATION

Steve Jobs’ 7 Mantras of Success How is it that a college dropout, who landed in his parents' garage and who was once kicked out of his own company, became one of the world's foremost innovators?

Consultant Carmine Gallo, the author of "The Presentation Secrets of Steve Jobs: How to Be Insanely Great in Front of Any Audience," has made a career of sharing the success secrets of Steve Jobs. Below, Gallo lists the seven ways Jobs managed to triumph in the face of daunting circumstances and how you can do the same.

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2. 'Put a Dent in the Universe' "Put a dent in the universe simply means that you have to have a big, bold, clear, concise vision. I like to say that your vision should -- fit in a Twitter post," Gallo says. Gallo referred to John F. Kennedy's "man on the moon" declaration: "We will put a man on the moon and return

4. 'Kick Start Your Brain by Doing Something New' Doing new things helped Jobs, in the word's of Apple's own slogan, "think differently." The inspiration for the Apple store came from the Four Seasons. That's why when you walk into an Apple store you will not find a cashier. You'll find a concierge. Walk to the back of the store and there's a bar. It doesn't dispel – dispense alcohol, but it dispenses advice," Gallo says.

5. 'Sell Dreams, Not Products' Jobs famously explained that the iPhone was not just a phone but a lifestyle.

6. 'Create Insanely Great Experiences'

1. ‘Do What You Love, No Matter What It Happens to Be’ "Don't settle ... as with all matters of the heart, you'll know when you find it," is what Jobs told Stanford University graduates in a commencement address in 2005.

Gallo says cook-turned-talk show host Rachael Ray embodies this advice. "Rachael Ray did what she loves," Gallo says. "She was giving cooking lessons at Macy's, for nothing! She was giving free cooking classes because she loved what she did."

it, there were no decisions," Cringley says.

him safely to Earth by the end of the decade." "John Kennedy, in 1961, had a clear, concise vision. If Twitter had existed that day, he could have tweeted it," he says.

3. 'Say No to 1,000 Things' Simplifying his business was key to Jobs' success, Gallo says. "In 1997, when he returned to Apple, Apple was close to bankruptcy. He took 300 products and condensed them to 10, within a two-year period," he says. Simplicity also extended to Jobs' personal style, says Robert Cringely, who worked with Jobs since 1977. "In latter years, he decided he would wear the same outfit every day, so that he, you know, didn't have to think about it, no one had to think about

"For Jobs, it wasn't just about selling 29 million iPads this summer but entertaining the customer at the same time," Gallo says.

Whether you run a multi-billion dollar tech company or a pizza parlor, innovation, he says, "means creating an experience for your customer."

7. 'Master the Message' Gallo says Jobs wasn't born a naturally gifted presenter he was visibly nervous during his first live television interview in the 1970s but he improved over time. "In 2007, he actually gave what I consider the greatest presentation I've ever seen the introduction of the iPhone," he says. Others can learn from Jobs' secrets, Gallo says.

Consider, he says, asking yourself what Jobs might do in a given situation. "When you start asking yourself what would Steve do, it's a high bar to reach," he says. "But it's worth reaching."

FITNESS

Walk Fast, Live Long?

US researchers say your gait can predict your longevity, as a new study found that seniors with the fastest strides lived longer than their slower walking counterparts.

ublished last week in the Journal of the American Medical Association, the study examined the walking speeds of some 35,000 seniors. For both women and men aged 75 or older, the fastest walkers enjoyed longer lives, with 87 percent of the fastest men living 10 more years in comparison to the slowest walking men. Ninety one percent of the fastest walking women lived 10 more years than their slower counterparts.

The researchers, however, aren't assuming that simply picking up your walking pace will increase your longevity, but that "your body selects a walking speed that is best for you based on the health of all your body systems," researcher Stephanie Studenski, a geriatrician at the University of Pittsburgh Medical Center, told The researchers, Discovery News.

however, aren't assuming that simply picking up your walking pace will increase your longevity, but that "your body selects a walking speed that is best for you based on the health of all your body systems."

Still, a short, simple walking test could possibly be a useful aid for doctors when screening patients for overall health, suggested the researchers in a report published earlier this year in the same journal. That report also found a strong correlation between walking speed and expected survival rates for persons over 65.

Prior findings support the notion that lacing up your walking shoes is one of the best way seniors can stay fit and healthy. One study reveals that walking just 9.5 kilometers (six miles a week) may keep your brain sharper as you get older. Also a Harvard University study found that women who walked regularly at a brisk pace had an almost 40 percent lower risk of stroke.

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Seth Landefeld, director of the University of California, San Francisco Mt. Zion Center on Aging, told Discovery News that measuring gait speed could be especially helpful in screening for cancer and heart disease.

IN-FOCUS

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Manappuram Not Just Creates Wealth, But Shares it Too Manappuram Finance has delivered yet another quarter of blockbuster results, with both income and profits more than doubling, and clearly outpacing most peers. Manappuram’s stock has recently resumed its upward journey, which incidentally had created many millionaires in India, especially in Kerala, during the last decade, in its equally blockbuster market-beating performance.

Interestingly, many of them are not just investors, but employees at Manappuram who have been fortunate enough to be the beneficiaries of the first ESOP in this sector. Manappuram Chairman VP Nandakumar, a professional banker and extraordinary entrepreneur, explains to Seasonal Magazine, why Manappuram Finance is all set to scale greater heights in the coming years, mainly due to a demonstrated culture of sharing, as well as professional management. Off to the interview with this unique business leader, who still finds time to tend to his numerous cows and goats, and his farm, and who even while touring Switzerland or Australia, admits to be more attracted by its animal farms rather than its investment banking businesses.

We don’t think there is any overhang as such, other than the general uncertainty in the markets.

The stock has gained reasonably post results, and one thing you should take into note is that Manappuram stock’s volumes have shot up during the past few weeks. In NSE alone we see that per day volumes have crossed 25 or 30 lakhs. Evidently, there is good demand as well as churn in our scrip. But we don’t keep a tab

on a day-to-day basis, and our belief has always been that our duty is only to focus on fundamental performance, and that the markets will take care of itself.

entering are not big issues. As I mentioned just now, it is something that the market takes care of. We are not overly bothered with such movements.

Recently, a noted FII had exited the Manappuram counter. Do you see any further exits or entries?

But why the high churn, really? Have you thought about it?

?

If you are familiar with our shareholding pattern, you will know that around 32% of the shares are held by FIIs or international PE funds. All are noted players. You can verify it by checking the biggest investors who hold more than 1% in Manappuram. Be it CLSA, Merrill Lynch, Wellington, Hudson, or the around 15 such investors. So one player exiting or two others

VP Nandakumar, Chairman

?

Well, we think it is largely due to the internal dynamics of these PE funds. After all, these are done by individual fund managers, who have their own personal objectives like incentives or bonuses. It is a highly compe titive field, with a high percentage of performance-linked pay, as well as high attrition. Most managers don’t stick with a fund for more than 3 years. So that is one of the main reasons for this kind of churn.

There are numerous NBFCs in the fray now, some bigger and many smaller than you.

Since last several months, the market also has another listed player in gold loans, Muthoot Finance. In other words, there are lots of investment opportunities before investors.

What according to you is the main attraction of Manappuram counter now?

?

Well, if you meant pure financial attractions for our stock, the main factor that will play to our investors’ advantage is that we have a very high capital adequacy ratio, and what that means is that there is no need to raise further funds for a long time. In other words, no urgent necessity for an equity dilution for the next oneand-a-half years. Looking at the financials of some of our peers, we see that they will soon require urgent and significant Tier-1 funds to go forward. That will entail significant dilution for their investors.

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Manappuram Finance has again delivered a good set of numbers, with both income and profits more than doubling.

But the share price performance, though good, was not matching.

What could be the overhang on the stock?

?

Why should it necessitate significant dilution? That kind of a dilution was for Manappuram too isn’t it, during the last QIP for Rs. 1000 crore?

?

No, our equity was not significantly diluted. The dilution you see is due to the last bonus and not the QIP, which amounted to only a 22.5% dilution. The same may not be applicable for any of our peers going in for fund raising now, as the valuations are relatively very low now than when we went for QIP. Due to this precise reason our stock may be positively re-rated than our peers, soon.

You mentioned this as the pure financial factor. Are there any other fundamental reason?

?

Well, there are many reasons favouring a counter like ours among the NBFC pack, and I personally think it is not decent on my part to talk about it. It is the job of analysts or financial journalists. But one thing I would like to underline is that it is difficult to find as ardent a wealth creator as Manappuram Finance in not only this sector, but in the entire midcap space. It comes directly from our culture of sharing wealth.

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?

Can you elaborate on this sharing culture?

There are lots to say on this front, but the core point is that we have a specific track-record in sharing prosperity. The promoting family led by me, has kept only around one-third of the wealth, and has shared around two-thirds of it with our stakeholders. By stakeholders we don’t mean just our investors, but also our employees. We were the first in this sector to provide

substantial Employee Stock Option Plans. Due to our ESOP, many of our senior employees are today millionaires. Among retail investors, we have virtually lost count on how many we have made millionaires.

But can’t this sharing ? culture be learnt by other organizations? Is there any other factor that attracts highprofile investors?

Theoretically yes, but then why every other IT company is not an Infosys, or why every other IT promoter is not Murthy? We think sharing is something in our culture, our blood. The point is we have a demonstrated trackrecord in sharing. And the bigger story is not about the stock making money for everyone. It is about building and sustaining a thoroughly professional organization. Though promoters now hold around 36% share, I am the only one in the Director Board. No brothers, sisters, wife, children, or that kind of hankypanky. All other directors are thoroughbred professionals, many of them better qualified and experienced than me, and they are either Executive Directors or Independent Directors of good standing.

You mentioned ESOP. But ? even in companies like Infosys, what we have found is that ESOP and all has to stop after several years. Are there any other unique employee benefits?

Ok, forget ESOP for a moment then. We encourage our suitable employees to go for their MBA, if they don’t already have one, and fund their MBA program fully.

That way, we are not only making the whole Manappuram team more professional, but proving to

them the long-term commitment we have for them. This is definitely not an NBFC which is staffed by underpaid, and therefore grumpy, retired bankers coming to while away their time.

Manappuram will always be a young, forward-looking organization.

?

Is Manappuram planning for a banking license?

We have not applied yet, though from the discussion papers which are out, we seem very eligible. Let the full norms come out and then we will take a call on it. We are not too eager, but not ruling it out either.

Let me repeat an oftrepeated question at you.

Are you eyeing a major risk from a potential bust in gold prices?

?

Not at all. I think gold has already gone through its brief and shallow technical correction, and it is set to zoom once again, and probably set to make stunning highs by March 12. In fact, I remind everyone close to me to not miss Manappuram’s Upcoming Corporate Office

Why are you so bullish on ? the yellow metal?

The answer is obviously gold’s safe haven status, as you already know. During the last few months, I was touring UK, Switzerland, Australia, & Middle East. There is still significant uncertainty in those markets, except Middle East which has started booming on oil again. The situation in US also continues to be grim. All such volatility and uncertainty revolves around major currencies, and gold is the obvious safe haven even for mid-sized funds.

Some pockets of the market ? is sensing a risk from the days-past-due issue facing NBFCs. Is there a significant NPA risk faced by Manappuram when RBI revises NPA classification to 90 dpd?

There will be a change in NPAs, but we don’t expect it to be significant in the case of gold loan companies like us. Currently, the NPAs are calculated at 180

The main factor that will play to our investors’ advantage is that we have a very high capital adequacy ratio, and what that means is that there is no need to raise further funds for a long time. In other words, no urgent necessity for an equity dilution for the next one-and-a-half years.

Looking at the financials of some of our peers, we see that they will soon require urgent and significant Tier-1 funds to go forward. That will entail significant dilution for their investors.

days-past-due, and when it get revised to 90 there will obviously be a small change. But on the longer run this is a non-issue as we now go in for auctions after 15 months only, and if 90 dpd is enforced, we may need to do it at 12 months. That would be the only lasting change brought by the dpd change. Anyway, most of our loans are of the shorter, 100 days duration.

? What about Manappuram Group’s new forays into healthcare and jewellery retailing?

Both are progressing satisfactorily. Jewellery business is already on since the last one year, now there are 17 showrooms,

with a majority of the shops in Bangalore. We have recently branded it as Riti Jewellery. Our healthcare company, MACare is also gearing up for its first mainstream launch, which will be a major diagnostics facility in Kochi. We are awaiting the last approvals for the same.

Eventually, we will go in for a nationwide rollout for both the diagnostics division as well as jewellery chain.

You have always ? maintained them as separate entities from the listed Manappuram Finance. Any change in plans?

Not at all. They are being built from the ground up as standalone entities, already proven fit for major private equity deals, and will be developed with the distinct aim of sectoral domination as well as for going public. I expect Riti and MACare to go for their IPOs

by FY’15.

What all constitute ? Manappuram’s CSR activities?

We have adopted 7 panchayats in and around our hometown of Valappad, in Thrissur District of Kerala, for the purpose of providing free comprehensive health insurance for all BPL families. Under this unique scheme, in tie-up with Oriental Insurance, Manappuram Foundation has covered the health of more than one lakh fellow-citizens belonging to more than 20,500 families. The scheme has greatly benefited these economically challenged neighbours of Manappuram, with disbursements of over Rs. 3 crore in the past year alone. I want Manappuram to be the best practical example in not only wealth creation for its various stakeholders, but in sharing our good fortune with our less fortunate neighbours.

SEASONAL MAGAZINE

the gold rally, as it seems to be a sure-shot bet to me, as of now.

INDIA

SEASONAL MAGAZINE

Full of Surprises in...

The 15 Fastest Growing Cities in India

here are 37 Indian cities among the world's 300 fastest growing urban centres, according to a survey conducted by the City Mayors Foundation, an global think tank on urban affairs.

There are many shocking surprises in this reliable list which is largely based on population growth rate, as this automatically takes most other paramaeters into consideration. The biggest shock is that Mumbai is not even among the Top-25. An equal shock is that New Delhi is still growing with great momentum, and is the country's 8th fastest despite its already huge size. Another surprise is that Bangalore is the only South Indian city among Top-15, with only one other South Indian city, Coimbatore, faring among Top-25. So, here are the places you have to keep an eye on if you are part of any kind of pan-India operation, or if you are nurturing a keen eye for real estate investments.

Beihai in China is the fastest growing city in the world, with a population growth rate of 10.58 per cent, says the survey. Sana'a in Yemen, with a population growth rate of 5 per cent, is the world's third fastest growing city.

Kabul in Afghanistan (4.74 per cent), Bamako in Mali (4.45 per cent), Lagos in Nigeria (4.44 per cent) are the 5th, 6th and 7th fastest growing urban centres in the world. Dar es Salaam in Tanzania (4.39 per cent) and Chittagong in Bangladesh (4.29 per cent) are the 9th and the 10th fastest growing cities in the world.

Also with small cities offering better infrastructure, better work-life balance and lucrative jobs, the boom is evident. Although there's still some way to go for smaller Indian cities to be counted amongst India's best, they have already caught up with (in some case even beaten), the bigger ones in terms of fast-paced development and urbanization.

So which are India's fastest growing cities according to City Mayors?

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The economic boom has been a catalyst for the fast-track development across India. The nation's development has now shifted from the big metropolitan cities to the smaller cities where the cost of living is much lower and the quality of life far better.

1. GHAZIABAD Almost cheek by jowl to New Delhi, Ghaziabad is the fastest growing Indian city and the second fastest growing city in the world, according to the City Mayors study. A rapidly expanding and industrially booming city, Ghaziabad is home to some of the world's best and biggest shopping malls and multiplexes. The construction boom in Ghaziabad is nothing short of phenomenal. Ghaziabad's average annual population growth rate: 5.20%.

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3. FARIDABAD The largest city in Haryana, Faridabad is the major industrial hub of the state.

According to reports, the city accounts for half of the income tax collected in the state and about 60 per cent of Haryana's revenue. Faridabad, says City Mayors, is India's 3rd fastest growing city and the eighth fastest growing urban centre in the world. Faridabad's average annual population growth rate: 4.44 per cent.

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4. NASHIK Nashik, the 'wine capital of India', is located about 200 km from Mumbai. It has been ranked as India's fourth fastest growing city and the 16th fastest growing in the world. The city's demographics make it ideal for the services sector boom that it is experiencing. The industrial sector too is growing rapidly in Nashik.

Nashik's average annual population growth rate: 3.90 per cent.

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2. SURAT

The City Mayors Foundation has ranked these cities assuming annual growth rates for urban areas between the years 2006 and 2020. The study places special emphasis on growth/ decline in the past and forecasts for the future made by international and national statistical organisations. Surat, India's diamond city, is India's second-fastest and the world's fourthfastest growing city. Surat average annual population growth rate: 4.99 per cent .

5. PATNA Patna, the capital of Bihar, is a major agricultural hub with its production of foodgrain, sugarcane, rice, etc making it one of the major exporting centres. Under the new government, headed by Chief Minister Nitish Kumar, the state has seen rapid growth and Patna, by far, has been one of the biggest benefactors of this thrust on development. In 2009, the World Bank ranked Patna as the second best city in India to start up a business. The city also has lowest slum population of any city in India. Patna is India's 5th fastest growing city and the 21st fastest growing city in the world, according to the study. Patna's average annual population growth rate: 3.72%.

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8. New Delhi Though it doesn't currently rival Mumbai in terms of contribution to the growth of the Indian economy, the capital of India, is no pushover. New Delhi has been ranked as the 8th fastest growing city in India and the 28th fastest growing urban centre in the world. Delhi GDP stands at about Rs 1,60,739 crore (Rs 1,607.39 billion). It contributes 4.94 per cent to all-India GDP. Being an important commercial centre in South Asia, Delhi has a per capita income of Rs 53,976, which is more than double the national average. Delhi's key service industries, backed by as strong and well laid out infrastructure, include IT, telecommunications, hotels, banking, media and tourism. In recent times, Delhi's manufacturing industry has grown considerably and consumer goods industries have established manufacturing units and headquarters in and around the capital. New Delhi's average annual population growth rate: 3.48 per cent.

7.JAIPUR

Rajkot, one of the largest cities in Gujarat, is the nation's 6th fastest growing city. It has been ranked by City Mayors as the 22nd fastest growing urban area in the world. Rajkot's average annual population growth rate: 3.63%.

9.PUNE The growth of this major industrial city, located roughly 170 km east of Mumbai, has a booming economy. Pune, India's 9th fastest growing city, has been ranked as the world's 29th fastest growing urban centre. Starting from automobile majors like Tata Motors, DaimlerChrysler, Pune will soon house units of global biggies like General Motors, Volkswagen, Fiat, et cetera. A number of important engineering goods industries like Cummins Engines Co Ltd and Bharat Forge Ltd, electronic goods companies like LG, Whirlpool, food companies like Frito Lay and Coca Cola are also located here. Of late, Pune's software industry has grown by leaps and bounds. IT parks like Rajiv Gandhi IT Park at Hinjewadi, Magarpatta Cybercity, MIDC Software Technology Park at Talawade, Marisoft IT Park at Kalyani Nagar are seats of technology that the city can boast of. To meet the demands of this explosive economic growth in Pune, the state of Maharashtra is planning a 1,000 MW power plant to exclusively cater to the need of Pune. MIDC is the lead agency for the project. Pune's average annual population growth rate: 3.46 per cent.

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6.RAJKOT

Jaipur is India's 7th fastest growing city and the 24th fastest growing urban centre in the world, according to the City Mayors study. The capital of Rajasthan, Jaipur is a major hub for traditional and modern industries. It has a booming gems and jewellery industry and is one of the largest exporters of gold, diamond and stone jewelery in Asia. It is also coming up as a major ITES centre, apart from handlooms, textiles, readymade garments, and carpets. It has been ranked 31st among the 50 Emerging Global Outsourcing cities. Jaipur's average annual population growth rate: 3.60 per cent.

12. AGRA

10. INDORE Indore, the commercial capital of Madhya Pradesh, is home to hundreds of small-scale and large-scale manufacturing and industrial units in areas of automobiles, pharmaceuticals and textiles. It is the 10th fastest growing city in India and the world's 32nd fastest growing urban centre. A major trading hub, it also has a rapidly growing presence in software, retail and real estate sectors. Indore's average annual population growth rate: 3.35 per cent.

11. ASANSOL

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Asansol in West Bengal is one of the busiest trading centres in India. It is the 11th fastest growing city in India and the world's 42nd fastest growing urban centre. It is a coal mining hub, and has a swiftly growing industrial arena. The city boasts of a huge workforce with its per capita income being much higher than many Indian cities.

Asansol's average annual population growth rate: 3.11 per cent.

Agra, the home of the Taj Mahal, is a major centre of small-scale industries and a growing hub for hospitality. It is the 12th fastest growing city in India and the world's 53rd fastest growing urban centre. It is ideal for business in small-scale industries, education centre, tourism, hospitality, biotech, textile exporting, automobile, and real estate. Agra has some of the finest hotels and spas in India. It has Uttar Pradesh's first plant biotech company, Harihar Biotech. It is also an important market for the automobile industry. Agra's average annual population growth rate: 2.93 per cent.

13. AMRITSAR It is the 13th fastest growing city in India and the world's 6oth fastest growing urban centre.

Amritsar has been experiencing rapid growth in the last few years, with billions of rupees being poured into the development of its infrastructure, etc. One of Punjab's largest cities, Amritsar has also seen a major boom in the real estate arena.

Amritsar's average annual population growth rate: 2.85 per cent .

15.BANGALORE The capital of Karnataka, Bengaluru is also called the Silicon Valley of India. Hundreds of major IT corporations, both home-grown giants and multinational majors, have their headquarters in the city. It is the 15th fastest growing city in India and the world's 67th fastest growing urban centre. It has the country's fourth fastest growing FMCG markets, and is home to thousands of millionaires.

Bangalore also boasts of having the largest number of households with an annual income of Rs 10 lakh (Rs 1 million) or more. With an estimated population of 6.5 million, Bangalore is one of India's most populous cities. And although the city's infrastructure has been unable to keep pace with the rapid growth of the city, Bangalore still remains one of India's boom towns. Bangalore's average annual population growth rate: 2.79 per cent.

14. MEERUT

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Meerut is a major industrial city in Uttar Pradesh, but it also has a booming agricultural sector. The city houses hundreds of small- and medium-scale industries. It is the nation's 14th fastest growing city and the world's 63rd fastest growing centre.

Meerut's average annual population growth rate: 2.83.

IN-FOCUS

“Musli Power Xtra Will Storm the Market Again” When we met him with our hard questions, he was still to get the favourable court order executed in his favour by Kerala’s Department of Drugs. But KC Abraham showed us a copy of the court order, the legal advice that he has received, as well as a copy of the national level lab test result that disproves adulteration - all of which have already given him his characteristic energy back to take on his detractors head on. Abraham’s plans are getting bigger - to almost unbelievable levels - as he speaks about targets of Rs. 1500 crore turnover, booming demand from overseas, and going public through an IPO. Seasonal Magazine quizzes Kunnath Pharma founder on the future of the controversial ayurvedic formulation he invented: What do you feel regarding the whole episode of ban and the now possible revocation?

In two simple words, it is the triumph of truth and justice. Musli Power Xtra stuck with those values, and these values saved us at the end of the day.

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That is a very general or vague claim. Can you be more clear?

Isn’t it very clear? We have never adulterated our medicine. But some concerned authorities weren’t believing. But our customers knew better. You will be surprised to know the number of calls I personally received from users, on the day the test result was published. Almost all of them said only one thing - we knew Musli Power was clean.

How come they know it?

You don’t understand. These are patients who have tried everything under the sun, and got dejected. These are patients who are suffering from the harmful side-effects of equivalent

allopathic drugs. They know better about Musli Power Xtra, that it is effective and clean, free of side effects. But the authorities wanted analytical test results from India’s most well-equipped Government run lab. Now it has come. No tadalafil, sildenafil, or any steroids, as alleged. That is the truth part of this affair.

And the justice part?

Well, some time back we were running from pillar to post, in search for justice. We were alarmed that even a clean, effective product like Musli Power Xtra was being targeted. We told our honest story to many in authority, but we didn’t get justice from any quarters. Not from the state, not from the centre, not from any bureaucrats, not from any politicians. They weren’t just being indifferent. But we finally got justice from the courts. That is why we say that our recent success is the triumph of truth and justice.

But you are still barred from giving advertisements…

Not really. We can give ads but can’t cross the line of the magic remedies act. We welcome that. No one is above law. In fact, even much before this issue was brought up in court, we had revamped our entire ad campaign to strictly adhere to the magic remedies act. Musli Power’s new slogan - ‘For Healthy, Happy Family’ - reflects it.

But even that was challenged in court…

Yes, it was objected to, but it was overruled by the court with some conditions. Musli Power Xtra can use it, as well as two formats of advertisements, and another thing is that in the coming days, Kunnath Pharmaceuticals will vigorously start fighting for our legitimate rights to advertise, as a legal entity that not only stand in no violation of law, but is also a responsible corporate citizen that diligently pays all kind of huge taxes to the state and central governments.

A couple of moments back, you

told the authorities were not just being indifferent. Why? Are you repeating that Musli Power Xtra is being targeted? By whom?

I won’t say all the authorities, but definitely, some of them are working on the behest of vested interests. We have always said that MNC pharma companies are behind this whole affair. The sale of allopathic erectile dysfunction drugs like Viagra, Cialis, Levitra and its clones were getting seriously affected due to the popularity of Musli Power Xtra.

What are your re-launch plans for Musli Power Xtra?

We have already kick-started a relaunch program in New Delhi. A three-month promotional program is being organized as part of the major trade fairs happening there in this season. We are there in the Delhi IITF-2011 at Stall-27 of Kerala Pavilion. This has been the seventh year of our participation in that big fair. Apart from good discounts, the free service of two doctors who are infertility specialists employed by Kunnath, is being provided there. In Kerala, as a first step, our illuminated vehicles announcing our renewed presence in the market, are travelling to all towns. As a relaunch offer, we are also providing 33% capsules extra, free of cost.

We are moving out from targets of hundreds of crores in turnover to thousands. Within the next five years, Musli Power Xtra will be targeting a turnover of Rs. 1500 crore. Demand is booming from overseas markets, and we are systematically pursuing suitable tieups in each country.

What has been your core learning from getting banned and this coming-back-to-life episode?

Number one, entrepreneurial success of anyone is not tolerated at all in Kerala. Number two, any businessman who has been a resounding success in Kerala should be admired above all.

Anyone can learn valuable lessons in survival from them. Number three, however nasty or powerful your enemies are, you can survive if you fight for truth and justice.

Number four, it is very very important to grow fast, grow

exponentially, if you are to protect your brand, your company.

So, how are you planning to implement these lessons?

We are already planning to expand our factory facilities, from Kerala, to Rajasthan, where we already have a large presence in farming our herbs. On the farming front too, we will de-risk by expanding to places like Tamilnadu and Karnataka, from just Kerala and Rajasthan. We are considering some huge lands near Ooty and Sirsi-Banavasi. Coming back to the market after a lull, we are moving out from targets of hundreds of crores in turnover to thousands. Within the next five years, Musli Power Xtra will be targeting a turnover of Rs. 1500 crore. Demand is booming from overseas markets, and we are systematically pursuing suitable tie-ups in each country. For the current year, our target is to double from last year’s Rs. 55 crore to around Rs. 100 crore. Kunnath Pharma is also actively planning to become a listed public company by going in for our IPO within the next few years.

SEASONAL MAGAZINE

But that is just an assumption of yours as the bereaved party, isn’t it?

Let me ask you a question in return. Why has there been no action against so many blatant violations of the drug adulteration rules and the magic remedies act?

Simply because, they haven’t been as successful as Musli Power Xtra.

The moment your sales surpass certain figures, and start hurting these allopathic monopolies, they will be after you in various guises.

TECHNOILOGY

Facebook, HTC building Android smartphone:

Send free national, international SMS using JaxtrSMS JaxtrSMS lets users send unlimited free text messages to any other phone anywhere in the world.

Sabeer Bhatia, founder of Hotmail, has launched a new mobile application called JaxtrSMS, which will allows users to send free SMS to any person around the world from any phone.

Facebook has allied with Taiwan's HTC to build a customized smartphone powered by Google's Android mobile operating system, according to a leading technology blog The project, code named "Buffy," is aimed at making a handset tailored for the California-based social networking platform, according to the blog, which is owned by Dow Jones, publisher of The Wall Street Journal.

The device would "deeply integrate" Facebook, which has more than 800 million members, "at the core of its being," All Things Digital said.

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A Facebook team has been working with HTC as well as trying to make deals with telecom providers for the smartphone, which it hopes to release within the next 18 months, the blog said.

The best part of the application is that it sends the SMS to receivers' SMS inbox, and does not require the recipient to install the app. This "open" facet of JaxtrSMS distinguishes it from other free mobile messaging applications such as

Sabeer Bhatia

Whatsapp where messages can only be sent within a closed network to people who also have the same app installed.

JaxtrSMS retains the number of the user and no new number is required while signing up for the JaxtrSMS service.

It is available as a free download for phones based on iOS, Android, BlackBerry and J2ME. "JaxtrSMS was completely developed in India. I am proud to showcase this as an example of Indian innovation and ingenuity," said Sabeer Bhatia, the chief operating officer and co-founder of Jaxtr.

A Facebook spokesman declined to comment directly on the "Buffy" project to Things Digital but said: "Our mobile strategy is simple: We think every mobile device is better if it is deeply social.

The Android application works exactly like the native SMS client of the phone. It fetches contacts from your phones contacts. You can also manually type the number. The receiver gets the SMS and information like name and number of of the sender.

"We're working across the entire mobile industry; with operators, hardware manufacturers, OS providers, and application developers to bring powerful social experiences to more people around the world," the spokesman said.

Right now, the message contains a link to download this app, but going forward we believe it will have advertisements too. But then it would not be intrusive and the ads are likely to show up at the end of SMSes.

HTC already builds phones with dedicated Facebook programs.

The app's native look is something that will make it easier for people to adopt this new SMS medium, as there is no learning curve involved for users. What is also good is that you can send SMS from any tablet as well.